WEDNESDAY, 8 NOVEMBER 2006 __

                PROCEEDINGS OF THE NATIONAL ASSEMBLY

                                ____

The House met at 14:03.

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.

                          NOTICES OF MOTION

Mrs S M CAMERER: Madam Speaker, I give notice that I will move:

That the House congratulates the National Prosecuting Authority on the sterling work they are doing in bringing criminals and offenders to book without fear or favour and affirms Parliament’s view that no one is above the law.

Mrs C DUDLEY: Madam Speaker, I give notice on behalf of the ACDP that I shall move:

That the House debates issues of alcohol abuse in South Africa and the need for urgent and relevant responses by government and other stakeholders.

            DEBATE ON MEDIUM-TERM BUDGET POLICY STATEMENT

The SPEAKER: I now call the hon Nene. Hon Nene? Hon Nene, did we catch you by surprise? [Laughter.]

Mr N M NENE: Thanks, Madam Speaker. I just hope I have the right speech. [Laughter.]

The SPEAKER: We all hope so.

Mr N M NENE: Yes, definitely. Madam Speaker and Members of Parliament, the success story of the South African economy ever since the ANC took over the reins cannot be downplayed, not even by our political foes in this House.

The ANC has stood firm on its founding principles of equality, justice and democracy for all. Macroeconomic policy has evolved over time to respond to the material conditions that affect the vast majority of our people, particularly those that were previously marginalised.

The tabling of the tenth Medium-Term Budget Policy Statement on 25 October 2006 is further confirmation of our government’s commitment to transparency and accountable governance. According to one of the commentators on the MTBPS, the Minister of Finance “opted”, to quote that commentator, for a more responsible route in this statement.

Mr Michael Biggs, an economist with the Deutsche Bank, says fiscal policy will act countercyclically to reinforce monetary policy. He goes on to say that National Treasury’s investment forecasts are optimistic relative to our own projections. Treasury’s exchange rate forecasts, in contrast, appear to be pessimistic.

His observation is that the extent of government dissaving should decline and so contribute to current account stabilisation during the course of the MTEF. His view is that this should only contribute to a more structural stabilisation in the deficit should it continue. He further states that these projections imply a public sector borrowing requirement that surges in 2009-10.

While, in the interim, the current account implications of investment spending are more moderate, the improvement in savings is incidental rather than fundamentally reflecting a shift in expenditure and so financing patterns of government.

In terms of the major features of the MTBPS, this statement outlines the government’s focus on sustainable economic growth and development aimed at improving the lives of all South Africans. This is demonstrated by the choice the ANC government makes when faced with fiscal space that prevails. Despite continued revenue overruns, the MTBPS expresses concern about the potential for fiscal policy to exacerbate emergent imbalances in the economy, in particular the current account.

Expenditure on infrastructure and social services continues to be prioritised, and this is financed from the higher than expected revenue collections and a decline in debt service cost. As such, the statement projects a budget balance reaching a surplus of 0,5% of GDP in 2007-08 before moving to a moderate deficit of 0,4% in 2009-10.

Appearing before the committee, one of the economists, Mr Dennis Dykes of Nedbank, noted that even though demand-side elements are in place, the supply side has lagged behind. National Treasury, in the 2005 MTBPS, also expressed this view. This has been reflected in inadequate capital formation. He also warns that short-term growth will be hampered by physical and financial constraints – referring to the exchange rate, inflation and interest rates - but is optimistic about the long-term growth which he says will ratchet higher with increased physical infrastructure, capacity and skills development key ingredients.

Mr Lumkile Mondi, the Executive Vice President of the IDC, provides a balanced analysis of this MTBPS - that unemployment is a major challenge. He provides a detailed, calculated analysis that concludes that our economy will have to grow at a much faster pace than the current and projected rate. Using the Human Development Index as a measure of the country’s economic and social wellbeing, it is clear that more needs to be done, particularly in the rural areas.

Uhulumeni kaKhongolose uzibophezele ekuthuthukiseni umnotho waleli zwe ukuze ukwazi ukwenza ngcono izimpilo zabantu bonke. Lolu hlelo lokwethula isandulelo sesabiwomali lweminyaka emithathu luqonde ukwethulela isizwe umgomo kahulumeni mayelana nokusetshenziswa kwemali kule minyaka ezayo, ukuze abantu babe nezwi ekutheni lowo mgomo uyahambisana yini nezidingo zabo.

Ukukhula komnotho okusimeme kule minyaka edlule kubeke isisekelo esiqinile sokuba kukwazi ukuthi kuqiniswe ukwakhiwa kwezingqalasizinda ezinjengemigwaqo, ukufakwa kukagesi, ukusatshalaliswa kwamanzi nokwakha izindlu.

Isasasa lemidlalo kanobhutshuzwayo ye-2010 nalo liyisigwadltulo esikhulu ngoba izodala amathuba emisebenzi nokutshalwa kwezimali okuthe xaxa kule sikhathi nangemuva kwale midlalo - uma lezi zakhiwo zizokwakhiwa ngendlela yokuthi zikwazi ukwenza eminye imisebenzi. Izinkundla zemidlalo kufanele zikwazi ukudlalela izinhlobo zonke zemidlalo, ziphinde futhi zikwazi ukuba yizindawo zokubambela izingqungquthela nemihlangano emikhulu. (Translation of isiZulu paragraphs follows.)

[The ANC-led government has committed itself to developing the economy of this country so that it can make a better life for all. This three-year cycle programme of presenting a debate on the Medium-Term Budget Policy Statement aims at presenting the nation with the government’s fiscal policy on public spending in the coming years, so that people will have a say whether that policy is in line with their needs.

The sustainable economic growth in these previous years intensified the establishment of the infrastructure like the building of roads, connecting electricity, supplying water and the building of houses.

The hosting of the 2010 Fifa World Cup will make a major contribution because it will create job opportunities and greater investment during and after these games – if these buildings are going to be built in a multi- factorial way so that they could be used for other things. Stadiums must be able to be used for other sporting codes and they must also be used as conference venues.]

In terms of policy priorities and the division of revenue, the Medium-Term Budget Policy Statement proposes the following changes to the division of revenue: R18,6 billion of additional resources to the provincial equitable share; R9,6 billion to supplement conditional grants to provinces; R18,9 billion for local government, of which R12,1 billion consists of conditional grants in support of the 2010 Fifa World Cup; and R32,9 billion for national department functions, which includes provision for recapitalisation requirements of state-owned enterprises.

Increased provincial allocations support the broadening of access to services, and local government allocations support infrastructure-related spending and the extension of basic services to poor communities.

The committee considered the statement and had hearings to test the opinions of outside observers, whose submissions I have referred to, and we are satisfied with the macroeconomic policy as presented. The committee’s report we table here today has two recommendations: firstly, that government continue to give priority to the issue of resolving the skills shortage and that a progress report be brought before this House quarterly in order to evaluate the impact of the programme; secondly, that government create an environment that encourages higher investment through addressing the competition and regulatory constraints.

The ANC supports the Medium-Term Budget Policy Statement 2006 and commends the Minister and his team on putting it together, and trusts that the implementation of this policy and engagement with stakeholders will yield the desired results of bringing about a better life for all. I thank you, Madam Speaker. [Applause.]

Mr I O DAVIDSON: Madam Speaker, during the Budget debate in February, I complimented the Minister on his achievement of putting South Africa’s public finances in excellent shape. As a result of primarily high domestic and public consumption expenditure, we achieved a gross domestic product growth of 4,9% last year. A fairly high tax rate, now approaching 28% of GDP, and excellent tax collections resulted in bumper revenue overruns, thin budget deficits, reduced borrowing, and both high infrastructure rollouts and public service expenditures.

As the Minister observed, we’re in a good space, more particularly because of the fiscal room that has been created. If our public finances are in good shape, what of the underlying economy? A more truthful observation would be that despite repeated and valiant attempts by South Africa to escape its narrow economic straitjacket, we have been stuck in a low- investment, low-growth and low-employment paradigm. The 4,9% GDP growth was essentially achieved, as I said, by higher consumption and expenditure.

Indeed, as the Medium-Term Expenditure Framework indicates, we are consuming twice as much as we are producing, resulting in the deterioration of the deficit on our current account. To add to our woes, the strong rand has caused havoc with our nonresourced export industries which, in the main, absorbed high levels of unskilled labour.

How does the policy statement respond to these challenges? Our objective is spelled out quite clearly by the Accelerated and Shared Growth Initiative for South Africa. If you are going to halve unemployment by 2014, you have to achieve GDP growth of 4,5% between now and 2009, and 6% thereafter.

How can we judge Asgisa’s potential for success? We can’t as yet judge the outputs, but we can scrutinise the inputs. In this context, we have the benefit of the working papers of the panel of economists led by Professors Houseman and Roderick from the Centre for International Development at Harvard, which was commissioned by the government to assess Asgisa as a strategy.

One of the main elements of Asgisa to date has been the public sector infrastructure rollout. Last year, it was R372 billion but now it was raised to R409 billion for the particular period. While it is acknowledged that the large infrastructural spending is necessary because of past years of neglect, it is the nature of the investment that the Harvard papers find problematic.

Because it is focused on the nontradeable sector of the economy, and is essentially financed by inflows into the financial account, Harvard’s financial forecasting model, using both Treasury and BER numbers, indicates that these investments will, paradoxically, most likely lead to further external imbalances. As they rightly point out, international studies indicate that growth accelerations – that is exactly what we want – will only eventuate with improvements in the external imbalances of the economy.

Another question raised is whether the amount of resources we have and the associated productivity levels will be sufficient to deliver the levels of output and growth rates envisaged by Asgisa. Asgisa sets out to raise total investment from 18% to 25% of GDP, but a proper analysis of that 18% indicates the problem I identified earlier, namely, that the major portion of the investments has been in a nontradeable sector. The investment in the tradeable sector, namely, manufacturing, mining, and agriculture has oscillated around 5%, and is indeed declining.

In any event, can we sustain these relatively high levels of token investment? Well, a warning light is showing in respect of foreign inflows. Net foreign investments up to the time of the MTEF were about R82 billion, broken down for the five months from January to May. Inflows into the Johannesburg Stock Exchange and bond markets were R58 million. For the second five months, this inflow dropped to R15 billion with no signs of recovery.

If overseas savings are drying up, what of the domestic ones? The problem is that South Africans are notoriously bad savers. South African savings, as a percentage of GDP, have dropped now to 13,75%.

The conclusion that the Harvard Working Papers come to, once again, is that large increases in spending will put pressure on domestic resources, requiring significant increases in government and private sector saving, or alternatively, will lead to further external imbalances.

In respect of productivity, they note that Asgisa tends to achieve 2% growth from a 6% increase in investment, a required investment three times larger for the equivalent output of successful international growth successions. This speaks directly to employment and productivity growth, which both have to improve dramatically. Unfortunately, the Reserve Bank points to a continuing decline in productivity, and Roderick points to an unemployment problem which is structural in nature with wage levels being too high in the economy.

Their conclusion is that given the employment and productivity performance of our economy, even such large investments as envisaged in Asgisa, will barely deliver the desired growth rates while imposing an impossible burden on investment. This is even before discussing the feasibility of increased savings to finance the growth without further increasing the external vulnerability of the economy.

As a result, they believe that Asgisa has serious macro inconsistencies that need to be addressed. This is why the DA believes that the policy statement was a disappointment. There were no indications of how these macro inconsistencies are going to be addressed, going forward.

Roderick is quite clear that an export-orientated strategy that increases relative profitability of producing tradeables for world markets will generate economic growth by pulling labour into productive activities where their marginal product is much higher. Therefore, what we need to do is encourage investment into the productive side of the economy by way of a range of fiscal incentives that boost long-term confidence, increase savings and create a positive climate for investment.

That is exactly what we have to do with that fiscal space that is available. We have to lower the corporate tax rate over a period of time from 29% to 25%. This will produce the savings. This will create the right climate. We have to provide tax offsets for new jobs created. We have to provide export incentives to priority sectors.

Professor Houseman actually identifies those sectors: manufacturing; manufacturing machinery and equipment; pharmaceuticals; agriculture; and ironically, chemicals. Why do I say ironically chemicals? It is because Sasol is mentioned by name, and we should be providing incentives to Sasol, not putting windfall tax on Sasol.

The GDP growth which creates employment has to be our major priority. The Harvard Working Papers are an extremely important contribution to the debate on how we achieve this. We all have to be part of that debate. It is vitally important; otherwise we won’t have the shared growth that we wish for. Thank you. [Applause.]

Mr H J BEKKER: Madam Speaker, the IFP would like to congratulate the hon Minister of Finance on a well-constructed and positive medium-term Budget.

The IFP will indeed be in support of the Medium-Term Budget Policy Statement as presented to Parliament by the Minister. We welcome the Medium- Term Budget Policy Statement, and particularly the plans set out in this mini Budget to alleviate the economic hardships of the desperately poor of South Africa.

Although more could have been done in this regard, we realise that other urgent and pressing demands are being put on the Minister, and the Budget cake must indeed be shared equitably.

The looming 2010 Soccer World Cup will have a very positive effect on the economy of South Africa, and it is with this in mind that the IFP applauds government for setting aside R14,9 billion for major capital projects for the World Cup, and over R4 billion to upgrade our overstressed public transport system.

I am a firm believer in the multiplier effect, and I am confident that this spending will, through the ripple effect of the multiplier effect, eventually be ten-fold in terms of what is going to be spent here. We will give you all the support in this regard.

We must, however, warn that the perception of lawlessness in South Africa could have a disastrous effect on the World Cup. About 45 000 visitors are expected for the event, with tourism revenue projected to be around R13 billion. Official estimates are that 130 000 jobs will be created and R21,3 billion contributed to the gross domestic product. Should South Africa’s crime crisis not be solved soon, there could be a low attendance, and that could possibly ruin our economic gains.

The IFP applauds, furthermore, the directing of a large portion of additional spending towards capital expenditure with an eye to upgrading roads and hospitals. We welcome the increase in spending on education and health and the R3,5 million allocated to Justice and crime prevention.

The IFP wants to reiterate its call that economic growth in South Africa, through the Accelerated and Shared Growth Initiative for South Africa, is of the utmost importance. Seven per cent annual growth is non-negotiable. Interest hikes, however, could be detrimental. We agree that excessive borrowing and credit should be controlled. Most definitely, there are other ways to curtail credit.

I think that here there should be the payment of a deposit in purchasing moveable or immoveable assets, particularly motor vehicles. Imagine that you can today get R5 000 cash back if you buy a new vehicle. That would mean that if you’re really broke, down and out, then you buy a new vehicle to get that money in your pocket. Those are the things that should be addressed.

In conclusion, the Minister of Education, with her disciplinary action in schools, will receive all the support from the IFP’s side. Every bit of discipline that’s coming back in schools, which is eventually having a spin- off effect on crime, is supported by the IFP. Minister, we support your Budget, and we will be voting for this Budget. Thank you. [Applause.]

Mr A HARDING: Madam Speaker, it is understandable that the Medium-Term Budget Policy Statement gave particular emphasis to plans for the 2010 World Cup. It is crucial that World Cup-related projects are carefully designed to promote long-term development and social investment over a much longer timeframe. However, the 2010 spending must not only be geared towards ensuring a successful event, but must also be placed in the context of a medium to long-term overarching developmental agenda. The World Cup must not be an end in itself, but rather a springboard to meeting broader objectives, achieving sustainable reductions in unemployment, poverty and inequality, and investing in basic infrastructure such as reliable transport.

The danger is, however, that government may focus all our development efforts on the cities where the matches will be held. This will further magnify the urban and rural divide, and will increase migration to the cities. Whilst the ID recognises the need to meet all the requirements for hosting the World Cup, we would also like to see equitable and even development in other cities and rural areas.

The adjustments to the 2006-07 financial year amount to R8,8 billion, but unfortunately, the adjustments also allow for additional funding to the Pebble Bed Modular Reactor. The ID would rather welcome government putting up start-up capital for small businesses.

In conclusion, we would like to call on portfolio committees to seriously look at section 30 reports released by the Treasury, and to call to book those departments who are underspending their budgets. Thank you very much. Mr S N SWART: Madam Speaker and hon Minister, the ACDP believes that the Medium-Term Budget Policy Statement reflects our country’s strong macroeconomic fundamentals. Despite the cut in growth forecast, we remain optimistic as to our economic growth prospects, particularly in view of the 2010 Soccer World Cup, and the additional massive spending on infrastructure required for this showpiece.

We also particularly welcome additional spending on fighting crime, social welfare, HIV/Aids and the additional investment in the built environment in the form of housing, roads, water, sanitation and community facilities.

The additional government spending will, we trust, help raise economic growth to the projected level of 6% by 2010, which in turn will cut poverty and reduce unemployment.

We do, however, remain concerned that economic growth at the moment is mainly consumer-driven, resulting in the increased current account deficit. We are undoubtedly importing far more than we are exporting, and spending far more than we are saving.

However, the ACDP broadly supports the Medium-Term Budget Policy Statement. Thank you.

Ms L L MABE: Thank you, Madam Speaker. Without repeating what other speakers have said, I would like to be as simple as possible so that even the person on the street would understand what we are talking about when we talk about the Medium-Term Budget Policy Statement.

I’d like to start by thanking the Minister of Finance for his sterling performance over the past ten years. I hope that in the coming years South Africa will continue to achieve as it has achieved up to now, in order for growth to be achieved, and in order for those who have been disadvantaged and excluded from participation in the economy in the past to be able to join others in the economy.

The Minister presented the statement as instructed by the obligations of government. I must remind members that those obligations are embodied in legislation, but also that this House, or rather the two Houses of Parliament, must ensure that they exercise oversight over what is contained in the statement.

Parliament, through its oversight, must ensure that the statement will achieve its intended objectives, so that at the end of the medium term we will not find that departments have been underspending rather than utilising the allocated funds to relieve poverty.

I would like to quote the Minister when he indicated that he was obliged to report, amongst other things, on economic developments and economic challenges that face the country, but also on how to meet these challenges through public spending priorities over the medium term.

It is of great concern to the Joint Budget Committee that most departments, when they appeared before the committee, did not engage on the outer years’ projections. Most of the departments engaged on the current financial year. That created a big problem for the committee because at this moment we are in a difficult position, to make recommendations as made by the different departments, and this is a challenge.

Therefore as a committee we are challenging the departments that in future Medium-Term Budget Policy Statements they must focus on the outer years, because it is crucial for us as Parliament to be able to monitor what they have in place. This is a big challenge. On behalf of the committee I am taking it to the different departments.

I’d also like to request the departments, as indicated earlier, to focus on those outer years because when you look at what is projected in the outer years, a lot of funds are earmarked, but the question is, are the departments ready to engage in the outer years?

I’d also like to raise as a crucial issue to this Parliament that without capacitating the Joint Budget Committee, we will not engage at all in the Medium-Term Budget Policy Statements. Instead we will rehash what the Minister states in his Budget Speech, or what is contained in the documents, without thoroughly engaging with what we want to happen in future. Therefore it is a challenge to Parliament to ensure that there is sufficient research capacity in all committees of Parliament, both select committees and portfolio committees, to engage the departments in terms of their projections.

It is important to know what the departments project for the future, to be able to engage with what happened in the previous year, what happens in the current year and what is going to happen in the future with regard to their plans. So that is a big challenge for Parliament and it is long overdue that Parliament must invest in research.

I want to raise some of the priorities contained in the Medium-Term Expenditure Framework, namely investment in stadiums and public transport. There is no way that we can have proper oversight to ensure that what is budgeted for in the medium term will be achieved without having information at the tips of our fingers.

Will we be in a position by the end of this year to evaluate whether the plans set up for the construction of the different stadiums are in place? Are we in a position as Parliament to monitor by the beginning of the year whether construction of those stadiums has begun or not? Come midyear, there should be no excuse to say that the environmental impact assessments have not been done and therefore the stadiums could not be built.

We have challenged the Department of Environmental Affairs and Tourism to speed up the process of the environmental impact assessments because those are delaying construction of most of the major projects. This is a challenge to the Department of Environmental Affairs and Tourism.

With regard to the criminal justice system we as a committee are saying - I want to emphasise this – that if those departments do not have an integrated approach, we will not achieve what we want to achieve. On paper we can continue saying that we are planning together, we are working together, when in practice we are not doing so.

I’d like to challenge these departments that, firstly, there is the construction of capital projects that is supposed to have taken place, or that is supposed to take place in the coming years. The Department of Justice should be in a position to account to Parliament with regard to the timeframes for the construction of High Courts in Limpopo and Mpumalanga.

Correctional Services must account to Parliament with regard to how far they are with the four prisons that are supposed to be almost complete and the other four that are to be constructed, because crime is an issue in our country and we must arrest delays before the whole project becomes late.

Another important matter is that of visible policing. To what extent have we employed the numbers of police as envisaged over the medium term? By how much have the three departments reduced the backlog in cases? How far have they gone in addressing the slow case flow?

I am saying this because it is part of what is projected over the medium term, that there will be an allocation to ensure that there is a smooth case flow, but without interaction amongst the three departments we will not be able to achieve that. Instead, we will budget and provide funds, but find that we are unable to achieve what we want to achieve as government. [Applause.]

It is the responsibility of the ANC to reduce crime. Crime affects our people, but I challenge the two Houses: let us monitor and have effective oversight over all government departments. But the major responsibility rests on Parliament itself: to provide research to the committees so that they can have information at their fingertips.

The other spending priority is investment in roads, rail and electricity generation. With regard to 2010, there is no way that stadiums can be built without the necessary road and rail infrastructure, so that one can travel easily from Durban to FNB within a day, through improved investment in rail and road infrastructure. Without rehabilitation of our roads, without rehabilitation of the rail system, both of which are earmarked in the spending priorities, there is no way that people will enjoy what other people from outside this country will be enjoying in 2010.

I want to raise the crucial issue of capacity in the different departments. There is already more investment in education, but we have to ask what the quality of the outcomes of that education is. What is the quality? What kinds of people are graduating in matric? Are they prepared to go into challenging fields in the economy? Where is mathematics? Where is science? Where is accounting? Are those learners prepared to be trained as artisans? These are the skills we need for 2010.

We do not want to continue to import skills. Is the department ready? Over the past ten years spending in education has increased and it is going to increase even more, but what is the output? We do not want to continue having people roaming the streets who have qualifications which are irrelevant to the economy. That is the challenge.

I know it is difficult but there is money earmarked in the outer years for building the capacity of teachers. What kind of teachers do we have? In ten years’ time we can’t say that we could not change the type of teachers that we have. We can’t! What is the output in education? Does the output match our spending? That is the challenge. [Interjections.]

Moulana M R SAYEDALI-SHAH: We support you!

Ms L L MABE: I would like to thank the members of the Portfolio Committee on Finance, the members of the Select Committee on Finance and in particular the members of the Joint Budget Committee. I’d like to thank this group for its contribution to this process, but I’d also like to challenge us as members of that committee to prepare more in the coming statements.

I want to thank them very much because we spent a lot of time working on what is before us, because the departments did not give us what we wanted from them. So I want to thank those members, but I’d also like to thank members of staff who were patient to work long hours with us. I want to thank them and also those departments that made an effort to appear before us. I want to thank them, but finally I want to express disappointment that we couldn’t interact with sports … [Time expired.] Thank you very much.

Mr M J ELLIS: Madam Deputy Speaker, the DA would be very happy for that hon member to have an extra five minutes.

The DEPUTY SPEAKER: Please take your seat.

Mr B E PULE: Madam Deputy Speaker, I am tempted to disagree with the previous speaker because she said it is only incumbent upon the ANC to make sure that crime goes down. I would say that it is incumbent upon every citizen of this country to make crime go down. [Applause.]

The UCDP commends the Minister for presenting the comprehensive Medium-Term Budget Policy Statement to this House. The Medium-Term Budget Policy Statement will hopefully address the goals of South Africa’s growth strategy that aims to modernise the economy and improve its competitiveness; and, above all, broaden participation and enhance social inclusion.

The following are all good intentions of this Medium-Term Budget Policy Statement: an additional R28 billion for public infrastructure; the strengthening of the criminal justice system - with emphasis on visible policing and improvement of court case flows; growth of provincial equitable share by 7%; growth of local government equitable share by 11%; about R45,7 billion capital expenditure transfers to municipalities, with R24,7 billion destined for infrastructure to rolling out basic municipal services; and capacity-building in municipalities as a priority.

It should, however, be noted that all these good intentions will be a futile exercise if departmental officials continue to claim to have no capacity and skills to deliver, whilst at the same time looting government resources. Words and phrases like noncompliance, underspending, fruitless and wasteful expenditures, misappropriation and roll-overs must have no place in the mental make-up of departments, if growth is to be sustainable as envisaged by the Medium-Term Budget Policy Statement.

The UCDP supports the Medium-Term Budget Policy Statement. [Applause.]

Dr S E M PHEKO: Madam Deputy Speaker, the PAC supports the Medium-Term Budget Policy Statement. With one minute allocated to me, I simply want to say that attention must be paid to an economy which is said to be growing but not creating jobs for the people of our country.

A labour survey put unemployment at 41% and youth unemployment at 70%. If these figures are correct, then South Africa cannot be said to be entering its age of hope, because unemployment is one of the causes of poverty among the majority population of this country. This is aggravated by the fact that company directors earn 111 times more than ordinary workers.

Growth in the economy has increased profits for owners of big businesses. Economic growth seems to rest on South Africa’s unequal structure of the economy that favours the wealthy. Such growth really rings hollow for the poor as it does not translate into jobs, nor more schools, clinics, decent houses, efficient transport, free education for the poor, eradication of poverty …

The DEPUTY SPEAKER: Order, hon Pheko, your one minute is gone now.

Dr S E M PHEKO: Izwe lethu! [Our land!] [Laughter.]

Ms S RAJBALLY: Deputy Speaker, we eagerly await the auspicious, wise and beneficial strategies that our hon Minister of Finance, Mr Trevor Manuel, has and which certainly have never failed to light our path to development delivery and growth.

The hon Minister, in his Medium-Term Budget Policy Statement this year, revealed that South Africa was in the midst of longer and sustained economic expansion. He said that robust economic growth, supported by strong consumer spending and rising investor confidence, had created over 1 million jobs in the past three years. It is statements of this nature that light up and bring confidence to our system. Our determination to deliver to our people is also crucial.

However, the reality that many remain homeless, with no electricity, proper sanitary facilities and potable water, dents the system. But the MF views these challenges as a light of determination to strengthen our efforts and overcome the hiccups that hinder delivery.

The MF praises South Africa’s goals to modernise our economy and improve competitiveness …

The DEPUTY SPEAKER: Order! Hon member, your time has expired.

Ms S RAJBALLY: The MF supports the Medium-Term Budget Policy Statement.

Ms R J MASHIGO: Madam Deputy Speaker, Ministers and hon members, the Reconstruction and Development Programme enabled people to identify and address issues that affected their lives. Since 1994, the inequalities which affect the South African people are being addressed by the ANC–led government. Research shows us that poverty has declined since 2000 as a result of the implementation of social grants and rising employment.

Social services delivery is a priority in our people’s lives and for the growth of the economy. We have seen an increase in expenditure, especially in this social cluster, as seen in the proposed revision to the three-year baseline estimates for the 2007 Budget that include education and teacher development; health and social welfare; housing, municipal services and community development; as well as transfers of provincial equitable shares, the bulk of which will be used to improve quality and access to health, education and social services.

I will briefly explain the above-mentioned priorities, starting with education. In the state of the nation address, the President mentioned that the government had to make interventions, which included no-fees schools that would target 529 schools to double mathematics and science graduate output to 50 000 in 2008. This will, hopefully, address the skills shortage. It will also invest in the schools infrastructure and equipment as well as the financing of further education and training.

As far as health is concerned, I will refer to hospital revitalisation grants which, as you all know, address many projects. To achieve this, the department must make sure that it addresses guidelines that will provide reporting to ensure effective monitoring. This will, in turn, reduce non- compliance with the Division of Revenue Act, Act 5 of 2004. Again, the department should continuously brief Parliament on progress and oversight visits must be done by different portfolio committees to make sure that the programmes are being truly attended to.

The spending of HIV and Aids conditional grants on the prevention, care and treatment plan should also be noted, as there is great improvement in the sense that many people are being reached through different programmes. Priority must also be given to TB treatment, the reopening of nursing colleges and the transfer of mortuaries and forensic services to the SAPS. Consideration should also be given to the improvement of remuneration of health professionals.

When it comes to housing, there should be improvement in the upgrading of informal settlements and the alignment of intergovernmental and interdepartmental funding to enable municipalities to deliver in all housing-related issues.

When coming to social development, I will refer to the social transfers, which are consolidated at national level through the SA Social Security Agency. This will enable provinces to focus on social welfare and community development. The attraction of social workers and the implementation of new social welfare legislation is also an issue.

The Department of Home Affairs is responsible for activities of the social cluster, from the cradle to the grave. This means that all socioeconomic activities concerning both the individual and national growth are based on documents that are available at the Department of Home Affairs.

Some of the crucial issues that need to be attended to in the Department of Home Affairs are that vacancies in this department must be filled; effective anti-corruption plans must be in place; the roll-out of the whistle-blowing policy should reach all offices; multipurpose community centres must be manned so that officials are able to service all people within that area on a daily basis. And, again, the purchase of mobile units is of grave importance as people in rural areas need IDs and must be accessed through these mobile units.

We all have challenges, as mentioned by our chairperson, hon Mabe. I won’t repeat them. I can only say that there are challenges. As our Minister Trevor Manuel said, it is a mountain to be climbed in stages and joy to be enjoyed, step by step. At the end of the day, all South Africans need better lives. With all those words, I can say the ANC welcomes the proposed revision and the estimates as stated in the Medium-Term Budget Policy Statement. I thank you all. [Applause.]

Mr S SIMMONS: Deputy Speaker, once again the hon Minister of Finance has produced results that deserve only applause. The hon Minister’s department displayed exceptional financial management skills pivotal to the state’s ability to deliver and encourage economic growth. Unfortunately, the same cannot be said of some other departments’ ability to achieve the same level of effectiveness.

Dit bly egter verblywend dat daar ‘n algemene besef by die regering ingetree het vir die noodsaaklikheid van remediërende optrede. [However, it remains heartening that the government has come to the general realisation that there is a need for remedial action.].

Consideration also needs to be given to the ability of departments to make proper projections of what their true financial needs are. Only time will tell whether the new measures will have the necessary remedial results to ensure effective levels of service delivery across the board. We therefore give our full support to the priority skills and the Siyenza Manje initiatives and trust that they will produce the required result of much- improved service delivery, especially at local government level. The United Party of SA supports the medium-term budget. Thank you.

Mr G D SCHNEEMANN: Deputy Speaker, Comrade Ministers, hon members, in the state of the nation address to Parliament on 3 February this year, President Mbeki said the following:

While we must indeed celebrate the high levels of optimism that inspire our people who are convinced that our country has entered its age of hope, we must also focus on and pay particular attention to the implications of those high levels of optimism with regard to what we must do together to achieve the objective of a better life for all our people. We have to respond to the hopes of the people by doing everything possible to meet their expectations.

The Medium-Term Budget Policy Statement, which we are discussing today, strengthens the age of hope that President Mbeki spoke about. It gives all South Africans the assurance that they will not remain in an age of hope, but that they will move into an age in which they will see their dreams and expectations being met.

It also enables us as the ANC and our government to continue to deliver on the commitments which we made in the 2004 national and provincial elections when we committed ourselves to entering into a people’s contract to create work and fight poverty, as well as earlier this year when the ANC presented a plan to make local government work better.

This Medium-Term Budget Policy Statement provides significant allocations over the MTEF with particular emphasis on allocations towards strategic investments that will leave behind a lasting legacy, particularly in the areas of tourism promotion, sports development and public transport.

A significant allocation of R15 billion is being made for the provision of infrastructure that will enable South Africa to host a successful and memorable 2010 Fifa World Cup that we can all be proud of. The hosting of the 2010 Fifa World Cup serves as a catalyst for investing in economic infrastructure in our country.

It will be important that the legacy of the 2010 Fifa World Cup, in relation to the allocations that are being made over the MTEF, leave behind a well-functioning and effective public transport system, and improved roads and sports facilities that will enable men and women, both young and old, to reach their dreams in the sporting arena.

The amounts that are being made available for the 2010 Fifa World Cup will require good planning and, more importantly, good implementation. In this regard, the Department of Sport and Recreation will perform a critical role in ensuring that these allocations deliver the best 2010 Fifa World Cup yet staged.

During the hearings which the Joint Budget Committee held in relation to the Medium-Term Budget Policy Statement and the announced allocations over the MTEF ending in the financial year 2009-10, a critical area arose which affected most, if not all, departments. This relates to underspending due to vacant posts and the capacity of departments to spend and deliver.

According to the Director-General of the Department of the Public Service and Administration who appeared before the committee, savings made due to underspending on vacant posts could fill up to 24 000 posts. Some of these vacant posts range from senior management, to planners, to clerks, to chief director and to deputy director-general posts.

I have raised this because we need to ask and understand whether these vacant posts have any impact on the ability of departments not only to spend but also to deliver effective and efficient services that will improve the quality of life of South Africans. Departments will need to ensure that where critical vacant posts are not able to be filled, they take steps to ensure that the work of the departments are not adversely affected but, more importantly, that funding over the MTEF period will be used to deliver what it has been allocated for. Strategies will need to be developed both to retain staff and to ensure stability of service delivery.

We welcome the fact that steps are being taken by government to strengthen the capacity of the state to deliver on its mandates. These include the modernisation of financial management practices as well as targeted interventions which are focused on dysfunctional institutions and programmes.

In addition, earlier this year the Deputy President launched the Joint Initiative for Priority Skills Acquisition, known as Jipsa. Together with the further education training colleges and higher education institutions, this programme will focus on producing graduates that could be employed to meet the needs of both the public and private sectors.

The Department of Sport and Recreation indicated in its presentation that between 13 000 and 15 000 volunteers will be required. It will be important to ensure that sufficient funding is allocated over the MTEF to ensure that these volunteers are well trained and ready to play their part in 2010.

The Department of Transport provided the Joint Budget Committee with details of the projects to be undertaken in preparation for the 2010 Fifa World Cup. These projects include the upgrading of roads, the upgrading of taxi facilities, the introduction of transport corridors, the construction of cycle and pedestrian ways, and airport and rail station upgrades, amongst other things.

In addition, the Medium-Term Budget Policy Statement proposes that an amount of R5,5 billion be transferred to local government for investment in public transport. These financial resources are being allocated to provide an efficient and effective public transport system and to improve transport infrastructure around the country. Proper planning and effective implementation will be critical in delivering quality outputs. This will include the need for well co-ordinated interdepartmental planning and budgeting.

The housing programme will be allocated R29,6 billion over the next three years, with spending on low-income housing reaching R11,5 billion per year by 2009-10.

In the presentation by the Department of Housing, it was indicated that the average delivery period of a housing programme from the planning stage to handover and occupation takes three years. What this means is that funds allocated over the MTEF period do not produce the intended housing units within the same period. The Department of Housing will need to consider steps which could be taken to reduce the average three-year delivery period.

Earlier, as I was speaking, I referred to the need for interdepartmental planning, co-ordination and budgeting. I want to raise housing as an example, because in Cosmo City in Johannesburg we are seeing this taking place. Construction work started in early 2005. As we speak here today, houses have been built, roads have been constructed, electricity has been installed, a taxi rank is under construction, schools are being built and parks have been provided. [Applause.]

This clearly indicates that if departments work together, plan together and budget together, programmes of government can be delivered in an effective and efficient manner. If the available resources are used effectively and efficiently, tomorrow will indeed be better than today. It requires a united and unwavering commitment from all who work in the respective government departments to work tirelessly to improve the lives of so many of our people who have placed their hope and trust in our government.

We as the ANC support the Medium-Term Budget Policy Statement. I thank you. [Applause.]

The MINISTER OF FINANCE: Deputy Speaker and hon members, thank you very much. I am encouraged by the deliberations that have taken place here, this afternoon, but also in the Portfolio Committee on Finance as well as the Joint Budget Committee.

As stated in the MTBPS speech on the 25th, the policy statement aims to provide Parliament and the public with the framework upon which the 2007 Budget would be based. It is very important to remind ourselves that the statement is actually not a requirement of any piece of legislation. It is an endeavour by government to advance transparency, openness and certainly to strengthen the oversight role of Parliament.

There is a curiosity in the way in which this matter is dealt with. For some reason the press has chosen to call this the mini Budget. There is nothing mini about it. It takes a long view at a level of abstraction allowing for policy discussion about the choices we make. If anything, it is a maxi Budget and not a mini Budget. But as with the gates, they don’t get very far with some of these things. This document has facilitated in the ranking we spoke about. We are now seen as ranking fourth out of 59 countries with regard to international transparency in budgeting - the initiative we referred to before.

The extent of our documentation and the amount of information it provides will not mean anything if it is not used to hold government accountable for the services that public funding buys. I am, therefore, particularly impressed with the work undertaken by the Joint Budget Committee, following the tabling of the statement and the committee’s 40 page report. I think it says it all. I want to say to the hon Mabe - I don’t see her. Oh! There she is - Well done! I feel my work is now done. Thank you very much. [Applause.]

More important, was the way in which the hon Mabe, on behalf of the committee, went back to the fact that we must, as Parliament, ask departments to talk, not just about next year, but also about the medium term. It is very important that Parliament helps to shift the culture into a planning culture, because it is by insisting on that that you prevent the roll-overs and the savings, because it is not about trying to get money now, it is about trying to focus on what the money will buy. These engagements with the Joint Budget Committee, I think, are exceedingly important in that regard.

I would like to turn also to some of the issues raised in the microeconomic context. I am sure hon Nene would forgive me if I don’t focus too much on what he said, but turn to what the hon Davidson said. In policy-making you always have choices. One of the choices that you can make is to take a very detailed, analytical, technical view and then believe all of the simulations, because at the end of the day your modelling only provides you with simulations. Then you follow that as closely as you can. But you need to understand that the power that we have over future information is severely constrained. That is one route you can take.

The other route is to do what we have done with Asgisa, which of course is partly aspirational. It is a set of policy outcomes you would like to attain and test. You test it as we do with this international panel to ask what issues require additional attention. We welcome their comments. And as I have sat before the paper in the name of Professor Roderick, published on the website, it’s in fact an invitation to the rest of the team to undertake peer review. We welcome it, because it is by engaging like that, partly in the open, that we will be able to identify what the binding constraints are.

I don’t think there is a dispute about the fact that we need to emphasise the tradeable sectors, but then it’s less about government and more about the way in which the private sector comes to the party. It is not always the incentives, hon Davidson; it is about where the private sector sees itself.

For now, there are a number of issues that we need to consider. One of them is that in the previous bull run what many firms, who should be baking bread or doing other things in the manufacturing sector, opted to do was to take their savings and invest them in the financial derivatives. Some of them made a heck of a lot of money and some lost their shirts.

Those who made money have opted to be on that side of the economy. That strengthened our services side but weakened manufacturing. And if you talk to manufacturers in South Africa, they repeatedly raise the fact that China is too big. So part of what our responsibility is, is instilling a self- belief about what we can and should be doing in order to ensure that they will take up the initiative, because to talk about incentives in vague and general terms doesn’t help us.

As a country we’ve done remarkably well. I don’t know of any other country in the world that has suspended all agricultural supply incentives. Our farmers are doing incredibly well. Surely, there are some of them who farm badly but in aggregate terms our farmers are doing pretty well. And that, I think, is part of the lesson. We have created a policy room that allows us to engage with the issues so that we could be focused and give attention to the incentives we need, incentives that resonate with the Industrial Policy Framework and not a series of favours doled out to friends and family. That is the position we need to be in. The issue of wage levels touched on in the paper has a flipside. The flipside raised very strongly is that South African businesses extract too high a rent from their business activities. What you are seeing is, in fact, frequently this endeavour to live like lords and extract very high rents. Part of the payoff to organised workers is to pay slightly higher rates, but then to leave too many people out of the equation. That is part of the difficulty. It is part of the growing inequality that confronts us in South Africa and it is something that we need to apply our minds to.

Regarding the issue of the current account deficit, what is happening is that our investments are growing faster than our savings ratios. It’s not all negative. Let us not dress in sackcloth and ashes and beat our brows and feel very sorry for ourselves. It is also happening at a time of huge global imbalances, a period in the world’s economy for which a textbook has not been written. Let’s not feel too sad about that.

The rigour of this exercise must be entrenched in the work of Parliament. Somehow, we need to find a way of giving it a bit more time. I think what is happening is that the outputs of the two committees are incredibly solid. I can go away from here with this report, sit with the Treasury, go back to the Ministers’ committee and the budget informed by Parliament, but the problem is it’s a bit too rushed. We need to give consideration to that and focus repeatedly on the objectives. I think we have to say to ourselves, reinforce that which is good but also not deny ourselves the right to claim victories where we need to.

The hon Dr Pheko talks about jobless growth. He must be talking about some other economy, because the numbers in South Africa speak for themselves; 540 000 jobs in the year to March and, in fact, 1,1 million new jobs for the three years to March of this year. That is not jobless growth. That is a rate of growth in employment that is faster than the number of school leavers, but it doesn’t sufficiently deal with the backlogs. Let us not beat ourselves up about it. Something positive is happening in this economy that we need to build on.

There are details also in the report of the Joint Budget Committee that we need to similarly reinforce, including the fact that the enrolment ratios for both primary and secondary schools, which will advance with the acceleration of the no-fee schools process, are very solid. Greater access to health care is evident in the rise in the number of visits to primary health care clinics from 81,9 million in 2000 to 101,8 million in the fiscal year 2005-06. As the hon Mabe says, those numbers speak for themselves. They mark change, so let us take joint responsibility for the quality of the outputs.

Improving the effectiveness and capacity of the state is central to initiatives such as Jipsa and the hon Schneemann spoke about the number of vacancies. Sometimes this is a bit of a mirage as well. It is necessary for departments to identify vacancies. It is necessary for some of those vacancies to be funded, but sometimes departments do pretty well without it and sometimes departments that are at 100% do less well. There is a different process rather than just looking at the numbers that we clearly have to get through.

Issues of the Siyenza Manje and Project Consolidate dealing with the skills gap in municipalities will certainly help us towards a single Public Service.

The issues of taking the fight against crime forth through increased recruitment, effective training and improved systems in the SAPS, Justice and Correctional Services, is the emphasis we want to welcome.

The increase in the tax ratio is also being raised by some of the members. Part of the difficulty is that we are victims of our own success. There is nothing that we have done in the design of the tax system that should give us anything more than 25%. It is the best estimate that we have available. We end up in the current milieu with 28,8%. It is huge, but we are the victims of our own success. Here we are as a country where, since 1994, tax rates, save for VAT, which has remained at 14%, have all come down. These are the results.

What is most important is that we take seriously all of the considerations of the two committees and the views articulated by members here this afternoon, as we certainly will. We must express our deepest appreciation for the hard work of the two committees in a very short space of time and give this House the assurance that these matters will be considered as we finalise the Budget for 21 February 2007. Thank you. [Applause.]

Debate concluded.

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

The Deputy CHIEF WHIP OF THE MAJORITY PARTY: Deputy Speaker, we move:

That the Report be adopted.

Motion agreed to.

There was no debate.

Report accordingly adopted.

                   ADJUSTMENTS APPROPRIATION BILL

                       (First Reading debate)

Madam Deputy Speaker, I would like to thank you for giving me this opportunity. I would like to remind members of this House that the adjusted national Estimates of Expenditure are a result of government policy, of what has been legislated. If departments were unable to achieve certain objectives, they will be able to redirect funds within those departments.

Section 30 of the Public Finance Management Act stipulates that at midyear departments should have a relook at their budgets, and adjust their budgets to ensure that spending will be in line with the priorities of government. They are also instructed by Treasury regulations to ensure that they are within the prescribed financial framework for spending by government departments.

I want to raise one issue of all those prescribed by section 30 of the Public Finance Management Act, and that is that there should be provision for unforeseeable and unavoidable events. To give an example, the area in the Cape region where there were floods and the areas of Taung could not be left in the situation that they found themselves in. It was important for government to provide for those unforeseeable and unavoidable circumstances. There is no way that government could say that it did not have funding to assist the people in those areas.

This is one of the prescriptions of the Public Finance Management Act which underpin the fact that government is in a position to control its funds and spending, indicating that in those areas there are funds for the construction of roads and houses, as well as the provision of water to the people who find themselves in those situations, so that at least they can have a better life.

I would also like to indicate that there is provision for unallocated funds, as per the Public Finance Management Act. Those unallocated funds are a challenge to us as committees of Parliament. As the year goes by, do we look at the spending of departments so that at the end of the financial year they will not have savings where they were supposed to have spent? And were they unable to spend with due reasons? We need to know what those reasons are and accept that it is a fact.

I will give an example with regard to the Department of Home Affairs. Home Affairs has a problem, and if it wants to restructure to address that problem, that is a valid reason; because we must remember that the Department of Home Affairs is one of the departments which are of crucial importance to the life of every citizen. So, if there is no restructuring, the problems in the Department of Home Affairs will continue in the coming years and that will be a problem. If it restructures as a result of its problems, we need to accept that that is a fact and the funds must not be used for the sake of spending, but must be saved so that they may be used once the restructuring is complete.

I would also like to indicate that the Minister presents his Budget Speech at the beginning of the year, and there are some commitments that are not provided for in that Budget. It is at this time that the Minister comes back to Parliament to say: “These are the priorities, but we were unable to provide funding during that period. Now, this is the situation.” An example is the building of stadiums for the 2010 World Cup. Those stadiums were not provided for, but now there is R600 million to ensure that construction starts. So, it is part of the programme of adjusting the national Estimates of Expenditure.

With regard to unspent funds, I would like to quote from the maroon book that deals with the adjusted national Estimates of Expenditure, in which the Minister of Finance says:” This is against the declared savings and underspending of R4,4 billion that are anticipated.” If those savings are anticipated, what do we say as members of Parliament about those anticipated savings at the end of this budget year? Do we have information about how those savings were effected or why they exist? Are we in agreement that there must be savings in those particular areas or programmes where there will be savings? Those are some of the things that we need to interrogate.

For instance, provinces and local municipalities do not spend much on grants. The division of revenue says that if they cannot account for how they are going to use the grants, National Treasury must withhold those funds. National Treasury must not disburse the funds, because disbursing the funds would mean that funds would be used for what they were not intended. So, we need to look at this vis-à-vis the reasons for the grants. I believe that members of this House will fully agree that money should not be dispatched to provinces and local municipalities when National Treasury is not sure whether the money will be well spent.

I would also like to refer to the Department of Health and challenge the Portfolio Committee on Health. Last year, R49 million was rolled over to this year. That money comes from HIV/Aids funding. This year, almost R20 million has been shifted from HIV/Aids to another programme. Have we been doing oversight as the Portfolio Committee on Health? Aids is a problem in our communities. So, the question is: What do we say?

But also, in terms of the joint budget, have we given you information to make you aware that the Department of Health is not going to spend? As a joint budget committee, do we have the necessary research capacity that I referred to earlier on in my other speech; so that we can inform portfolio committees in advance that this department is going to underspent, so that that portfolio committee can start to engage with the department?

It is worrying, Minister of Finance, that many departments underspent on vacancies that are not filled. It was worrying to us as a committee when one of the directors indicated that they could not spend on “clerical posts” - that is not a scarce skill at all. A matriculant …

The DEPUTY SPEAKER: Order, hon member. Your time has expired.

Ms L L MABE: Thank you. We support as the ANC. [Applause.]

Dr S M VAN DYK: Agb Adjunkspeaker, met betrekking tot die aansuiweringsbegroting staan twee elemente uit: Eerstens, dat sekere departemente soos Korrektiewe Dienste en Grondsake bykans R1,9 miljard nie gaan spandeer nie vanweë swak besturende administrasie; tweedens, dat sekere departemente R2,1 miljard sal onderspandeer, en dit alles terwyl dienslewering in Suid-Afrika tekort skiet.

Hierdeur ly openbare beleggings skade en word die nodige infrastruktuur en instandhouding daarvan nie geskep vir die privaatsektor om die ekonomie uit te bou nie. Saam hiermee ervaar Suid-Afrika ook swak beheer en bestuur van openbare geld deur sommige departemente as gevolg van kapasiteitsprobleme.

Die rede daarvoor is soos volg: Eerstens, ondeurdagte en onoordeelkundige regstellende aanstellings wat sy tol eis in oneffektiewe beplanning, swak finansiële en administratiewe bestuur en besluitneming, en gevolglik sloerende uitvoering van regeringsbeleid; tweedens, is tot 40 000 staatsdiensposte vakant; derdens, die lae werksetiek en lae vlak van opleiding van openbare amptenare wat openbare produktiwiteit onder 50% hou; en vierdens, die korrupte aanwending of verdwyning van openbare geld.

So die DA wil weet: Hoe verdwyn 600 motors sommer net so uit die Gauteng Departement van Vervoer se voertuigpoel? Hoe verdwyn R30 miljard sommer net so uit die Oos-Kaap se administrasie? Waarom kry amper ’n derde van die departemente ’n gekwalifiseerde oudit verslag die afgelope boekjaar?

Die aansuiwering vir die huidige boekjaar van R1,5 miljard tot die Nasionale Begroting gaan hand-aan-hand met die mediumtermynbegrotingbeplanning, maar as ons kyk na een van die brandpunte in Suid-Afrika wat vroeër ook hier genoem is, naamlik die “Criminal Justice System”, dan word geen ekstra geld in die huidige boekjaar vir die polisie aangesuiwer nie, ten spyte van die polisie se logistieke tekortkominge in al sy programstrukture, soos wat ons gister gehoor het. Van die ekstra R80 miljard oor die volgende 3 jaar kry Justisie en die Polisie net 4% daarvan, dit wil sê net R1,1 miljard per jaar vir die twee departemente. Dit is ’n skande en ’n verontagsaming van die regering se grondwetlike plig om sy landsburgers te beveilig.

Wat die polisie betref, maak die mediumtermynuitgaweraamwerk vir verlede jaar voorsiening vir 34 000 nuwe lede en met vanjaar se nuwe geld vir nog 8 000 lede. Dit word verwelkom, maar waar is die kapasiteit om die nuwe lede op te lei as die bestaande personeel nie eers behoorlik opgelei is nie? Tans beskik die gemiddelde polisieman nie oor ’n matrieksertifikaat nie en kan ook nie behoorlik verklarings uitskryf nie.

Addisionele begrotingstoewysings vir Justisie is bedoel om die departement se administrasie op te knap en personeeltekorte op alle vlakke van die regstelsel aan te vul. Met die huidige aansuiweringsbegroting vir vanjaar het Justisie R150 miljoen oorgerol vanaf laasjaar vanweë tenders wat gesloer het vir die aankoop van toerusting vir hofdiensadministrasie. Verlede jaar het Justisie net 89% van sy lopende uitgawes spandeer.

Korrektiewe Dienste kry niks van die addisionele R80 miljard nie, want die departement is so te sê in chaos. Die tragiese is dat Korrektiewe Dienste R197 miljoen teruggee vir die Tesourie omdat hy nie begin het om vanjaar vier tronke ekstra vir 12 000 gevangenisse te bou nie. En dan Minister Balfour se verklaring daarvoor aan Minister Manuel dat sy departement nie ingenieurs in diens het om die proses te hanteer nie – wil jy nou meer! Aai, Minister, dis ’n lekker land hierdie!

Korrektiewe Dienste het ook R603 miljoen van sy personeelbegroting teruggegee as gevolg van vakante poste, maar dan verwys die Tesourie daarna in sy aansuiweringsbegroting as ’n besparing. Minister Manuel, dit is nie ’n besparing nie, dit is uiters swak staatsadministrasie en niks anders as ’n ondermyning van die effektiewe “Criminal Justice System” nie.

Aan die ander kant help dit ook nie dat die Minister meer geld gee nie. Dit is kapasiteitsprobleme by hierdie drie departemente. Die fout lê dus by die bestuurskorps en strukturele probleme in die departemente self, of soos Minister Manuel dit self gestel het tydens ’n toespraak by Unisa, naamlik “dat die vermoë om die begrotingsgeld te bestee, ontbreek”.

Minister Manuel het genoeg geld vir openbare dienslewering, maar ongelukkig laat die tekort aan bestuurders by departemente hom in die steek om hierdie fondse effektief te benut. Die DA ondersteun die aansuiweringswet. Dankie. [Tyd verstreke.] [Applous.] (Translation of Afrikaans speech follows.)

[Dr S M VAN DYK: Hon Deputy Speaker, with regard to the adjustments appropriation budget two elements stand out: Firstly, the fact that certain departments like Correctional Services and Land affairs will not spend about R1,9 billion because of poor management and administration; and, secondly, that certain departments will underspend R2,1 billion, and this is happening despite the fact that there is a lack of service delivery in South Africa.

This will be detrimental to public investment and the necessary infrastructure will not be created and maintained in order for the private sector to expand the economy. In addition to this, South Africa is also experiencing poor control and management of public funds as a result of capacity problems in some departments.

The reason for this is as follows: Firstly, hasty and ill-considered affirmative action appointments resulting in ineffective planning, poor financial and administrative management and decision-making, and consequently the delayed implementation of government policy; secondly, up to 40 000 posts are vacant in the Public Service; thirdly, the low work ethic and low training level of public servants keep productivity levels in the Public Service under 50%; and, fourthly, the corrupt appropriation or disappearance of public funds.

Therefore, the DA would like to know: How can 600 motor vehicles simply disappear from the vehicle pool of the Gauteng Department of Transport? How does R30 billion simply disappear from the Eastern Cape administration? Why did almost a third of the departments get a qualified audit in the past financial year?

The adjustments of R1,5 billion to the national Budget for the current financial year go hand in hand with the medium-term budget planning, but if we look at one of the burning issues in South Africa that has also been mentioned earlier, namely the “Criminal Justice System”, then no additional funds will be appropriated to the Police in the current financial year, in spite of the logistical shortcomings in all the programme structures of the Police, as we heard yesterday.

Justice and the Police will only get 4% of the additional R80 billion over the next 3 years, that means only R1,1 billion per annum for the two departments. This is a disgrace and shows disregard for the government’s constitutional duty to safeguard its citizens.

With regard to the Police, last year’s Medium-Term Expenditure Framework makes provision for 34 000 new members and this year’s money for a further 8 000 members. This is heartening, but where is the capacity to train new members when the existing staff are not even properly trained? At the moment the average policeman does not have a matric certificate and cannot write statements properly.

The additional budget allocation for Justice is aimed at improving the department’s administration and supplementing staff shortages at all levels of the judicial system. With the current adjustments appropriation budget for this year Justice rolled over R150 million from last year because of delayed tenders to purchase equipment for court service administration. Justice only spent 89% of its current expenditure last year.

Correctional Services is not getting any of the additional R80 billion, because the department is virtually in chaos. It is tragic that Correctional Services has to return R197 million to Treasury because it has not started with the building of four extra prisons for 12 000 prisoners this year. And then we have Minister Balfour’s explanation for that to Minister Manuel, that his department does not have engineers in its employ to undertake this process - did you ever! Oh, Minister, this is a wonderful country!

Correctional Services also returned R603 million of its staff budget because of vacant posts, but in its adjustments appropriation budget the Treasury refers to this as a saving. Minister Manuel, this is not a saving, it is extremely poor government administration and nothing but undermining of an effective “Criminal Justice System”.

On the other hand, it would also not help if the Minister were to give more money. There are capacity problems in these three departments. The problem lies with the management corps and the structural challenges in the departments themselves, or as Minister Manuel himself put it during a speech at Unisa, “the ability to spend the appropriation funds is lacking.”

Minister Manuel has enough money for public service delivery, but unfortunately the shortage of managers in the departments does not allow him to use these funds effectively. The DA supports the Adjustments Appropriation Bill. Thank you. [Time expired.][Applause.]]

Mr H J BEKKER: Madam Deputy Speaker, the Adjustments Appropriation Bill is the vehicle for appropriating adjusted amounts of money from the National Revenue Fund for the requirements of the state for the financial year ending 31 March 2007.

The IFP supports the adjusted appropriations. In particular, we support the following appropriations: the R490 million transfer to local government as a conditional grant for use on the municipal infrastructure grant; the R960 million as conditional grants for the provincial infrastructure grant and the local government restructuring grant; the R624 million and R627 million, respectively, for the pebble bed modular reactor and the newly established InfraCo.

The problems that we have experienced with blackouts during this year must be a clear indication that more and more must be done, particularly in terms of the capacity for generating electricity in this country. We are in full support of that.

There is also R847 million for Denel. The streamlining and turnaround strategy of Denel are absolutely essential and, whereas we were hesitant in the past, it would seem that Denel is making progress and that its future could be of such a nature that it will be a self-funding organisation. We must realise what an important role Denel is playing and that we simply cannot allow Denel to slip away from us. Therefore this handover will serve very well in the long run.

There is also R160 million for higher education institutions, R75 million for the Government Employees Medical Scheme, and R49 million as a conditional grant to provinces for the comprehensive HIV and Aids grant. The IFP would like to congratulate government on the direct shift in the HIV policy, and for that the Deputy President and the Deputy Minister receive our praise. The IFP supports the Adjustments Appropriation Bill. I thank you. [Time expired.] [Applause.]

Mr S N SWART: Madam Deputy Speaker, hon Minister, declared savings and underspending of R4,2 billion are anticipated in the Adjustments Appropriation Bill. The question arises whether government can spend budgets and, in particular, capital budgets effectively. It is regrettable that we still have underspending, as is indicated in the Department of Correctional Services and the amounts that are being handed back to Treasury.

We are all in agreement that capacity constraints need to be addressed. Over the past five years the emphasis of fiscal policy has shifted from deficit reduction to growth and social development. Regarding this, it is widely agreed that we should shift from welfare towards development in order to address poverty and unemployment.

Underspending in the past and, in particular, with regard to capital underspending undermines this policy shift. We would hold that one of the main obstacles to achieving 6% growth is skills and investment in human capital. However, having studied this, the ACDP will support the Adjustments Appropriation Bill. Thank you. [Time expired.]

Mr R B BHOOLA: Deputy Speaker, as the executive seeks our approval on these estimated adjustments, the MF finds it necessary for us to express our sentiments on issues that worry us and those that appear promising.

The MF acknowledges that there exists a variety of reasons for the various adjustments to all sectors, whether an increase or a roll-over. However, we express distress over the R3,4 billion roll-over that certainly, in some cases, lends itself to incapacity to fulfil deadlines and project management.

We often hear cries about too little funding, but there is certainly a big question mark when the department ends up with a roll-over. Noting the seriousness of crime and our overpopulated prisons, we are in no way impressed, and we need to push hard if we are to rescue South Africa from the horrific crime reality.

We eagerly await the 2010 Fifa games and respect the 172,59% increase to the budget for Sport and Recreation in light of this. We are confident that the plans set out to transform South Africa into a fabulous host and to upgrade facilities to meet the challenges will be adequately applied through this funding. The MF supports the Adjustments Appropriation Bill. [Time expired.]

The DEPUTY SPEAKER: Order! I appeal to hon members, before I call the next speaker, to reduce the number of meetings in the House. We respect those meetings. We want to believe they are related to what we are discussing, but I’m sure it would be better to have them in your offices or outside the House so that we give respect to the people who are addressing us. If that is not going to happen, we might actually ask you and call you by name to leave the House, so that those who are interested in the business of the House will then continue with the business of the House. Thank you very much for agreeing that that should be the route to be followed. Mr N M NENE: Thank you, Madam Deputy Speaker and hon members. On all the categories of adjustments, as already outlined by all the speakers before me, the committee is satisfied that all requirements in terms of the Public Finance Management Act and the Treasury regulations have been satisfied. Therefore, we support the adjustments appropriation.

Requests for unforeseeable and unavoidable expenditure amounted to R7,3 billion. Of this, the Treasury Committee approved R1,7 billion, comprising R900 million for flood-related matters, R662 million to take care of the changes to VAT for government entities, and R138 million allocated to others which is spread amongst departments.

Under section 16 of the Public Finance Management Act, a total of R110,546 million was approved by the Minister of Finance as emergency funding, comprising the housing conditional grant of R84 million, provincial roads of R15 million and district roads of R11,451 million.

In terms of the amounts that were announced in the 2006 Budget, the total funding was R110,546 million, as I indicated, that was split amongst those entities, but the ones Mr Bekker alluded to that were for several state- owned enterprises: the pebble bed modular reactor, Denel, InfraCo, Alexkor and the SA Rail Commuter Corporation.

On the roll-overs, which is the fifth category, in terms of Treasury Regulation 6.4 we find that we deal with issues of unspent funds and payments for capital assets, which may only be rolled over to finalise projects and assets, and then we move on to the declared savings, which have also been alluded to by members.

During the 2006-07 financial year, there was a total of R2,1 billion, compared with R5 million in 2005–06, which is quite a concern, because if departments declare so much in terms of savings before the end of the financial year, it means that there are problems. The projected underspending for the current year is R2,1 billion compared with the projection of R2,5 billion for 2005-06.

The declared savings come from the following departments: We have the National Treasury with R130 million, comprising some of the Integrated Financial Management System project and the medical aid benefits for civil servants. The Department of Labour declared R2 billion in terms of a workshop for building at Indlela and a reduced number of learnerships. For Correctional Services there was R603 million; and for Land Affairs R1,122 billion for delayed restitution claims. The committee supports this adjusted budget. Thank you. [Applause.]

The MINISTER OF FINANCE: Thank you very much, Deputy Speaker, thank you, hon members. Let us just remind ourselves of the context. This House, arising from the Budget tabled in February, appropriated spending for this year at the level of R472,73 billion. If you take account of all of the additions now, we take spending in this year up to R474,23 billion. It’s the addition of about R1,5 billion of spending.

Again I would challenge members in this House to look at the trends in most other countries, and to find adjustments appropriations as infrequently as we do it in this country, and at levels as low as we do it in this country. It is almost unprecedented. We have to meet the requirements of the PFMA, especially in respect of section 30, for the adjustments estimates.

The tests are abundantly clear. The first of those would be unforeseeable and unavoidable expenditure. It is not either unforeseeable or unavoidable, but it has to meet both conditions and where expenditure requested meets those conditions, we clearly spend.

Secondly, there is section 16, which is a provision that allows us to spend here as we did in the case of Taung. Thirdly, there is the allowance to move money between one vote and another. Fourthly, there is the utilisation of savings, and fifthly, we allocate money that is rolled over from the previous year, but the rollover doesn’t necessarily apply in the same department.

We use those roll-overs to finance areas that we deem to be necessary here, but we do so in circumstances where the requests don’t meet all of the criteria of being both unforeseeable and unavoidable. There is a rationale to this. Let me just emphasise that. If you look at the schedules as published, firstly there is the declared or projected savings by departments. The largest contributor to that is the Department of Land Affairs.

What we do in the Budget is we finance the policy choice. The policy choice is land restitution. Land restitution has to follow a quasi-judicial process. The money is there, and when the department says, “For a whole host of reasons we can’t get through all of the legal processes, we are not going to be able to spend this money”, they return it to us as a projected saving. They must either follow a legal process, or they must take the land by expropriation. Don’t ask why, and don’t tempt it.

Dr S M VAN DYK: [Inaudible.]

The MINISTER OF FINANCE: Don’t tempt it, Van Dyk. Just don’t tempt it, Van Dyk. Here you have a legal process that we must support in the letter and spirit of the Constitution. Whether Van Dyk likes it or not, it’s the route that we will take. [Applause.]

Mr M J ELLIS: Madam Deputy Speaker, on a point of order: The hon Minister knows as well as I do that he has to refer to an hon member as an hon member.

The DEPUTY SPEAKER: Hon Minister, it is hon Van Dyk.

The MINISTER OF FINANCE: Okay, thank you. In respect of the under-savings the largest, I am saying, of them is Land Affairs at R1,12 billion. It is not carelessness. It’s a legal process. The department doesn’t control the legal process. Similarly, I can talk about the Treasury, where there is an amount of money that is dependent on a series of other inputs for the integrated financial management system.

We are not going to spend the money this year. And so, we hand it back early in the process, and then in addition, based on past experience, we are also projecting some underspending of about R2 billion, which, when seen against the spending levels of R472 billion, is a minuscule percentage.

In respect of the roll-overs, Deputy Speaker, I say that the rollovers are not from the same department. If you look at the schedules, the R49 million to the Department of Health for the rollout of antiretrovirals, as part of the comprehensive plan on HIV and Aids, is a rollover from other departments. It is not a rollover of that department. What is a roll-over of that department is the hospital revitalisation plan, but there is also additional money that has gone into accelerating the hospital revitalisation. Similarly the Department of Public Works receives money, and this is for learnerships in terms of the Expanded Public Works Programme. There is an amount of R32,5 million, and I know it is recorded - in some detail – in the committee report. That R32,5 million is not their own money, it is from a general pool of roll-overs that we have applied because we want to accelerate the skills level in order to ensure that we can deliver on the Expanded Public Works Programme.

One of the issues raised is the remuneration of members of the Police Service. Let me just say to members of this House that the unit costs of police are higher than the unit costs of both the Departments of Health and Education. It is a fact. We should not repeat the lie that our police in South Africa are underpaid. It cannot be correct. You can draw your international comparisons in detail.

I know this issue is held up frequently, that the police have too few motor vehicles. I want to stand at this lectern and say: It is without a foundation of truth. We must ensure that there is better efficiency in the application of the resource, but the resource is there and localised oversight through community police forums, I think, will certainly help.

Let me finally attend to the hon member for Orania, because you have to come from a place like that, have no world view, be narrow, caught in your own apartheid mindset, to respond like the so-called hon Van Dyk responds to life. He blames everything on affirmative action. There is nothing wrong. In fact, the productivity and outputs of this government are a heck of a lot better than they were at the time when he served in government in the apartheid state as a representative of a minority, serving the interests of a minority and ignoring all of our needs. Moreover we allow him to speak, unlike what happened when he was in government, when we were sitting in prison. Thank you very much. [Applause.]

Debate concluded.

Bill read a first time.

                   ADJUSTMENTS APPROPRIATION BILL

                (Consideration of Votes and Schedule)

The DEPUTY SPEAKER: Hon members, 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 ask questions … [Interjections.] Order, hon members, please! I have to repeat what I said because I was interrupted by the Whips, for that matter.

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 pose questions to the relevant Ministers. Members must please press the request-to-speak button if they wish to ask a question. Hon members should please wait until I recognise them before putting their question.

Vote No 1 - The Presidency - put:

Mrs S M CAMERER: Madam Deputy Speaker, in connection with the R10 million that has been made available by the Presidency for ex-Deputy President Zuma’s legal costs, I have the following related questions. Firstly, exactly how much of this amount is going towards Zuma’s legal costs in respect of the Shaik trial? How much is going towards his own corruption trial so far and how much towards his rape trial?

Secondly, is this an open-ended commitment of the Presidency? In other words, will more money be paid by government to cover Zuma’s legal fees if his corruption trial is reinstated and drags on?

Thirdly, what are the grounds for paying these fees? In this connection, the Supreme Court of Appeal’s decision this week to dismiss Shaik’s appeal and confirm the High Court’s ruling that there was a generally corrupt relationship between Shaik and Zuma surely makes this decision unconscionable. Is it not setting an appalling precedent, for it can surely not be argued that Zuma’s …

The DEPUTY SPEAKER: Order, hon member! Let me just make something very clear, before we proceed on a wrong course. The questions that we are going to be asking should be relevant to what we are dealing with now. Of course, you don’t expect presiding officers to know all 34 of the Votes and what they entail, but we are going to be guided by the executive. If you think that the question is not relevant to the Vote itself, then you are not compelled to answer that question.

To me, that question does not sound related to the Vote. However, I would like to stop you there and get a response from the Minister in the Presidency.

Mrs S M CAMERER: There is an item in accounts.

The DEPUTY SPEAKER: Hon Camerer, please complete your questions and then I will give an opportunity to the Minister in the Presidency.

Mrs S M CAMERER: Thank you very much. I was making the point that this is possibly setting an appalling precedent, for it can never be argued that Zuma’s alleged corrupt conduct was undertaken in furtherance of the business of the state.

In fact, Leonard Ramatlakane, Western Cape safety and security MEC and top ANC leader, rightly stated in 2004 when the Western Cape provincial government refused to pay the legal fees of Peter Marais and David Malatsi who, of course, were not ANC members, in their corruption trial that it would set a wrong precedent for government to fund the defence of officials accused of corruption.

The DEPUTY SPEAKER: Order hon Camerer! You are definitely abusing the time that I have given you. What we are dealing with here are questions, not statements.

Mrs S M CAMERER: Well, I was motivating my question.

The DEPUTY SPEAKER: There is no motivating; you just ask your questions. Hon Ellis, please take your seat.

Mr M J ELLIS: Madam Speaker, I rise on a point of order.

The DEPUTY SPEAKER: What point of order?

Mr M J ELLIS: The point of order is that this is an opportunity for political parties to make statements and to ask questions. [Interjections.]

The DEPUTY SPEAKER: Well, what we are dealing with here are questions based on the Vote, and that is where … [Interjections.] What are you saying, hon member?

An HON MEMBER: This is a Vote.

The DEPUTY SPEAKER: Will you please ask to be permitted to speak, and then I will give you an opportunity to do so. Listen, the Presidency will respond to that. I’m saying, let us refrain from making statements and ask questions, and the hon Camerer understands what I’m saying. Will you please take your seat because I think we understand where you are going. Let’s get a response. I thought you needed a response from the Minister in the Presidency.

Mrs S M CAMERER: I’m not sure, Madam Deputy Speaker, whether you’d like me to recap … [Interjections.]

The MINISTER IN THE PRESIDENCY: No, sit down. May I answer?

The DEPUTY SPEAKER: Hon Oliphant, I’ve just asked hon members to please respect the House. Let us respect ourselves. If anyone wants to rise on a point of order or anything, our Rules provide for that. However, I’m not going to allow people to scream around saying: “Sheila”, whatever. I don’t have Sheilas here; I have hon members. Okay? [Interjections.]

The MINISTER IN THE PRESIDENCY: Madam Deputy Speaker, I agree with your ruling. But I think that this thing is bad and we should put it to rest.

I just hope that some of the opposition party people, when they raise this issue, would find it just as appalling that Magnus Malan and Wouter Basson had their legal fees paid out of state funds. As a former Deputy Minister in this portfolio, let me remind hon Camerer about the enabling legislation which was enacted in 1957, when you people were in power.

Mr Zuma qualifies for legal representation at state expense under section 3 of the State Attorneys Act – so go and read if you want. The Presidency, as the last department with authority over the person requesting such assistance carries the responsibility for the payment of such legal costs, and had to ensure, in line with the requirements of the Public Finance Management Act and relevant Treasury regulations, that there are adequate funds to cover such costs.

The Presidency has not yet received any claim – and this will come later – in respect of the legal costs of Mr Zuma, and consequently does not know what the eventual quantum of such a claim would be. In the meantime – and that’s what is important – the accounting officer in the Presidency was under a statutory obligation – and so don’t ask him to defy the law - to provide for sufficiently budgeted funds to cover the claims in respect of such anticipated costs. Thank you very much. [Applause.]

Mrs C DUDLEY: Hon Deputy Speaker, hon Minister, funds shifted from the compensation of employees under Programmes 1,2,4 and 5 will be used to pay the former Deputy President’s legal fees and once-off human-resource- related projects. A matter of serious concern is the fact that the Presidency reported the underspending resulting from a failure to fill vacant posts as a saving, yet it was able to use a portion of this for these payments, while no indication is given as to when these posts will be filled. Can the Minister please explain? By the way, we would be just as appalled by the spending of such funds on Magnus Malan and Basson. Thank you.

The MINISTER IN THE PRESIDENCY: Madam Deputy Speaker, I’ve already responded to the first part. With respect to the second part of the question, it is quite clearly important.

Part of the problem has to do with obtaining security clearances in time, because anybody working in the Presidency, from the secretary upwards, has to get a proper security clearance given the nature of the Office of the Presidency.

The second point has to do with ensuring that we try as best we can to find the right kind of persons who’d fit into the jobs advertised. The third point is that we do, from time to time, lose very good people. We’ve recently lost the Deputy Director-General in charge of Communications, Murphy Morobe, who decided to join the private sector. I didn’t want to stand in his way. So that is the answer. Thanks.

Mr J H VAN DER MERWE: Madam Deputy Speaker, I am going to raise some questions about support services to the President of R4,5 million, and service in the Cabinet office. What is not reflected here is what I read in the paper, namely that R4,6 million is spent on overtime. So, we expect, when these moneys are voted for, to get … [Interjections] … some results.

Today I want to celebrate one year of waiting to see the President of South Africa. Because of the incompetence of the staff of the Presidency, they have not, until now, done their duty for which they get money here, to arrange for me to see the President. I think it’s a scandal, and I want to say to the hon Minister: Here is your cake. Come and eat it. I have waited a year. [Interjections.]

Madam Speaker …

The DEPUTY SPEAKER: Order, order, hon member! [Interjections.] Hon member, I know that we spend a lot of time at work. I’m sure we do need some social get-togethers, but not in the House.

Mr J H VAN DER MERWE: Madam Speaker, if you allow me, you can have a piece of the cake! [Laughter.]

The DEPUTY SPEAKER: Hon Van der Merwe.

Mr J H VAN DER MERWE: Can I finish my question?

The DEPUTY SPEAKER: As long as you know that you are taking time from the IFP’s allocated time.

Mr J H VAN DER MERWE: I know. We’ve got five minutes. I’m taking two. [Laughter.]

The DEPUTY SPEAKER: You’re on the fourth minute.

Mr J H VAN DER MERWE: No, no, no. Get another watch, Madam Speaker. [Laughter.]

Can I now put my question? Is the …

The DEPUTY SPEAKER: After your drama, yes, you may put your question.

Mr J H VAN DER MERWE: How does the Minister feel about asking for this money if, after a year, you haven’t made it possible for me to see the President? You should be ashamed.

The DEPUTY CHIEF WHIP OF THE MAJORITY PARTY: Madam Deputy Speaker, just on a point of order, I think the first issue that we need to deal with is the display of theatrics that we have seen here. I think this is a serious House; we are dealing with a serious matter. We are dealing with the Budget of the country, and for this to be reduced to a circus like this, I think, can’t be parliamentary.

The second point is that this matter arose during the state of the nation debate. The President clarified to Mr Van der Merwe that he has a parliamentary counsellor who should be approached with regard to appointments. I don’t know whether Mr Van der Merwe has made use of that …

The DEPUTY SPEAKER: Deputy Chief Whip, please take your seat. Mr Van der Merwe, obviously, we don’t search each and every member that comes into the House. You took all of us by surprise. [Interjections.] I was seated here and I was asking myself what that box was for. I asked the Table staff to check what the relevance of that box was, as if I knew that there was going to be some drama coming from that. I think you had a note from the Table requesting that, because I just said that I didn’t like that box, and I let them check what was in the box.

I think we should not reduce the stature of our House. I think a senior person like yourself, Mr Van der Merwe, should really lead by example. I think that act that we have just seen, which of course is going to be nice on the television, doesn’t augur well for the House. I wish I could get hold of a Rule that would actually be harsher than what I am saying now.

We don’t take kindly to this. I’m sorry, Minister. Will you please take your seat.

This is reducing the House to something else. I was there. You were there. As the Deputy Chief Whip was saying, the day you raised this question to the President, the President actually pointed you to Mr Jeffery. In case you don’t know where to find him, he is there.

For you to actually wait for this, a very important day in our nation, to do this, I think speaks very little of this House. [Interjections.]

Mr J H VAN DER MERWE: Can I react to that, Madam Speaker?

The DEPUTY SPEAKER: You are not adding anything!

Mr J H VAN DER MERWE: No, I am, because your facts are not right.

The DEPUTY SPEAKER: Which facts?

Mr J H VAN DER MERWE: You said that the President pointed to Mr Jeffery, and said I must contact him. Five or six letters have been written to Jeffery, asking for the appointment, and if he doesn’t know, today I am saying: John Jeffery, I want to see the President! [Laughter.]

The DEPUTY SPEAKER: He is an hon member, irrespective of how emotional you are.

Mr J H VAN DER MERWE: He is not doing his work! I needed to bring a cake here to expose their incompetence.

The DEPUTY SPEAKER: Sit down before you and your cake leave the House!

Mr J H VAN DER MERWE: They are incompetent! [Applause.]

The DEPUTY SPEAKER: Mr Van der Merwe, I am not going to take this kind of behaviour from you. I have asked you several times to sit down, and I am now asking you and your cake to leave this House. [Interjections.]

Mr J H VAN DER MERWE: Madam Speaker …

The DEPUTY SPEAKER: Please don’t waste our time. We want to continue with the work of the House. Mr J H VAN DER MERWE: Madam Speaker, I …

The DEPUTY SPEAKER: You are not addressing me on anything!

Mr J H VAN DER MERWE: Madam Speaker, I have not contravened any Rule. I am not going to leave the House.

The DEPUTY SPEAKER: You are going to leave the House, Mr Van der Merwe.

Mr M J ELLIS: Madam Speaker …

The DEPUTY SPEAKER: Mr Van der Merwe, will you please leave this House with your cake? [Interjections.]

Mr J H VAN DER MERWE: No. [Interjections.] I have done nothing wrong.

The DEPUTY SPEAKER: I have asked you three times to take your seat, and you refused to do so.

Mr J H VAN DER MERWE: The first time that you ask me to take my seat, check Hansard, I’m taking my seat. [Interjections.]

Madam, I am going to leave, not because you’re asking me to leave, but because I want to leave! [Interjections.] The DEPUTY SPEAKER: Of course …

Mr J H VAN DER MERWE: I don’t want to share the incompetence any longer. I’m going to leave. [Interjections.]

The DEPUTY SPEAKER: Go.

Hon members, let us be patient with Mr Koos van der Merwe and his cake as they both leave the House. [Interjections.]

The Member thereupon withdrew.

Mr M J ELLIS: Madam Speaker, can’t he leave the cake? We would like to eat it! [Laughter.] [Interjections.]

The DEPUTY SPEAKER: Order, hon members! I think that concludes questions to Vote No 1. We now put Vote No 2 – Parliament.

Vote No 2 - Parliament:

Mrs C DUDLEY: Hon Deputy Speaker, under Programme 1, an amount of R11,661 million was shifted from the compensation of employees to goods and services. In the same programme, the amount shifted was not spent because Parliament failed to fill posts in the public affairs and human resources sections. There appears to be no explanation as to why these posts were not filled and when they’ll be filled. Can the Speaker please explain?

There was also an issue around the situation of the Parliamentary Millennium Project, and funds were shifted there. Can you just explain why there was a need for additional funds for the Parliamentary Millennium Project? Thank you.

The SPEAKER: Deputy Speaker, on the issue of the posts with regard to public affairs and human resources, there are processes under way as we speak to fill those posts. So we believe those posts will be filled shortly.

With regard to the Parliamentary Millennium Project, PMP, an amount of R3,5 million for this project has been allocated to the parliamentary baseline for the 2006-07 financial year. An additional R3,5 million was allocated to a project budget for 2006-07. This additional budget is to cover the New Conversations SABC series and the Johnnic Learning collaboration, which you should know more about; if not, we are willing to give more information about it. Thank you.

Mrs S A SEATON: Madam Chair, Mr Van der Merwe, in his haste, just walked out with my documents. I can’t refer to the specifics … [Laughter.] … and this leaves us with a little bit of a problem.

There’s a problem with regard to money that was underspent on computers - that is there has been a virement there. Yet, there are Members of Parliament who have had computers stolen out of their offices which were never replaced, supposedly because there are no funds, yet money has been unspent on computers et al. What is the reason for this and why have these members then not received their replacement computers?

The SPEAKER: Hon member, regarding the specifics of why the money had not been used, I am going to find that answer and give it to you. But, of course, you know that the loss of computers, the process of members complaining about that and us looking into the matter, takes time. We do actually replace the computers.

I know that there are some cases that are still under way where there’s communication between the Secretary and hon members. We are trying to deal with those issues as they come. Thank you.

Vote No 9 – Public Enterprises:

Mr L W GREYLING: My, how the ANC has changed. The two biggest winners in this year’s MTEF are the arms industry and the nuclear industry. I am sure that this would not have been accepted 12 years ago. Despite the moral objections against these two industries, they are also hugely capital intensive and have not proven their economic viability.

The pebble bed modular reactor is suspected of becoming a bottomless pit for government money. Two years ago, when this government transferred R500 million to it, I asked the Minister of Trade and Industry what guarantee South African taxpayers had that we would not be financing this project year in and year out.

Two years later it seems that we are still funding this project to the tune of another R480 million, and its estimated cost just keeps rising. I will therefore ask the Minister for Public Enterprises the same question: What guarantee do South African taxpayers have that this will not represent another endless stream of money going to a project whose economic viability is in serious question?

Furthermore, is it wise to transfer such large sums of money to a project whose environmental impact assessment has not even been approved yet? I thank you.

The MINISTER FOR PUBLIC ENTERPRISES: Well, I think the member was largely making a statement and making some inaccurate inferences. I believe that these matters have been very well considered. His history is also wrong. His facts about the economic viability of both projects are also wrong. I think these matters go through a thorough scrutiny by the budget committee, and we are committed to these projects and have the support of everyone else except for a very small party. Thank you. [Laughter.]

Vote No 16 – Health:

Dr R RABINOWITZ: Thank you, Chair. I think the hon Deputy Minister is here. I don’t see her. Is the Deputy Minister here? Well, I’ll put the question. Maybe the Minister of Finance can answer it.

Sir, the current expenditure and strategy on HIV prevention, Aids testing and treatment is not having the desired result. There is little change to lifestyle, as evidenced by the increased number of pregnant learners, and an insufficient number of people are being tested and treated. Also, in the presence of HIV, it has been difficult to identify resistant TB.

In utilising the additional funds dedicated for HIV, will there be a change in strategy towards counselling and testing, making pre-test counselling group-based rather than one on one, and testing routine with an opt-out provision? Also, in testing for TB: will there be increased expenditure on testing by culture, rather than by microscopy, as that is the only way to identify the extremely resistant or other resistant forms of TB?

The MINISTER OF FINANCE: Madam Chair, those questions by Dr Rabinowitz deal largely with the policy detail. The key issue is, firstly, that we’ve rolled over additional resources for the battle against HIV and Aids, some of which will be spent on antiretroviral treatment. But from prevention through to testing, through counselling and through home-based care, the entire spectrum is covered. It is also important to recognise something quite separate from that. I raise this because one frequently gets the impression that when people talk about the health system, they actually mean the HIV/Aids system.

There is tuberculosis that exists in its own name and right. There are people who have contracted TB who are HIV-negative. There are many people like that in the country. There are people like that in the country that lapse with their treatment and then their tuberculosis converts to drug- resistant TB, eventually becoming extreme drug-resistant strains of TB. What we need to do is to isolate and ensure that the health system is capable of dealing with all of these things.

My plea to the hon doctor is to understand that we are not dealing with a single illness; we are dealing with a multitude of them. They need different treatments. They need special attention, and the health system has functioned in its entirety. That is why the amount availed is only for part of it. But, in respect of the peculiarities of the testing and so on, those are matters that I think the Department of Health is better able to deal with.

Here we are looking at the allocation of resources, and I would submit that it is adequate in the circumstances to adjust the money upwards. Thanks. [Applause]

The HOUSE CHAIRPERSON (Ms C-S Botha): I put Vote No 17 – Labour. Are there any questions? Oh, one moment. Hon Greyling, the ID’s time has expired, so you don’t have an opportunity for further questions. Does anybody else have a question on Labour?

Vote No 18 – Social Development:

Mr M WATERS: Chair, in light of the fact that the Department of Social Development is the government department tasked with alleviating poverty and assisting the vulnerable in our society and that the Supreme Court of Appeal has stated that government’s inefficiency in administering and paying out grants applied for amounted to “a war of attrition against the poor”, and that R320 million of the R376 million that was approved as roll- over funds for the Department of Social Development is allocated either expressly or partly for legal costs originating from both the last financial year and this financial year, could the Minister indicate how much of the roll-over cost is earmarked to pay out outstanding litigation costs from the last financial year and this financial year and how much of the roll-over funds is earmarked specifically for paying out settlements awarded to applicants in court actions successfully brought against the department for the same period?

Out of all the court cases in which the department is currently engaged, how many were bought against the department relating to instances in which the department allegedly failed to pay out grant benefits to beneficiaries? Lastly, what measures and targets are in place to reduce litigation costs and the number of court cases that the department is currently engaged in? Thank you.

The MINISTER OF SOCIAL DEVELOPMENT: Ndimvile lo mnumzana into ayithethayo, kodwa andiphethanga nto endingamxelela, ngayo ukuba yimalini na esaseleyo engekehlawulwa. [I have heard what this hon gentleman is saying but I do not have anything with me that can show how much money is still outstanding.]

Quite obviously, we have a lot of cases that are in front of us and most of those cases are definitely based on policy more than anything else. If the hon member could give me a chance, I will be able to give him that answer by tomorrow morning.

Vote No 20 – Correctional Services:

Mr J SELFE: Chairperson, I want to address the so-called savings made by this department. It is a fact that reoffending rates in our country are of the order of 90%. Most prisons are grossly overcrowded, very few inmates are educated or work productively, and very little rehabilitation occurs. Overcrowding happens because there is not enough prison space and rehabilitation can’t take place because there is not enough staff.

Large numbers of staff in the department act in positions for which they are not paid, yet this year this department failed to spend R603 million earmarked for the compensation of staff, that is posts that were not filled. And, they failed to spend R197 million budgeted for the new- generation prisons because these prisons that were first announced in 2002 have still not been built.

The root cause of this is the fact that the department is chronically badly managed. For the fifth year in a row the department received a qualified audit and, by common consent, was judged to be the worst functioning department. Now, it seems that they can’t even spend the money that has been voted.

My very direct question to the Minister is: What steps is he taking to ensure that competent staff are appointed to vacant posts? When will the problem of the acting appointments be a thing of the past? What steps has he taken to ensure that staff that have proved themselves to be incompetent, such as the national commissioner, are relieved of their responsibilities rather than being given a performance award?

The MINISTER OF CORRECTIONAL SERVICES: Chairperson, the hon Selfe is a member of our portfolio committee. Most of these questions that he raises here are questions that have been raised throughout the year. We deal with them and he knows how we deal with them. [Interjections.] [Laughter.] However, let me deal with them this way. The savings or the money that was for the new-generation prisons was surrendered because of the high costs. Through dealing with the National Treasury and Public Works, we agreed that once we have the feasibility studies we would then go back to them and renegotiate getting that money back – so I am not worried about that.

You didn’t mention the fact that Kimberly is functioning. On Tuesday, the Public Works department will be handing over the site in Kimberly. Those are some of the things that are happening. But then, as opposition parties, you have the right to look only at the negative side, not at the positive side. That is your responsibility and I accept that. [Interjections.] I have no problem and I would not be standing here shouting at you – I am not even shouting at you, I am actually smiling at you - if it had not been your responsibility. [Interjections.]

With regard to the vacant posts and staff, that is a problem. It is not only in Correctional Services but also across the board. But regarding ourselves, it is because we are looking for professionals. That is why we have problems attracting professional staff, which includes nurses, psychologists and top professionals. But also … [Interjections.] Hon Mike Ellis, you need a psychologist … [Interjections.] You need a psychologist, first of all, to deal with your hair and, secondly, to deal with your brain. [Laughter.] [Applause.] The HOUSE CHAIRPERSON (Ms C-S Botha): Order! Please!

Mr M J ELLIS: Madam Chairperson, may I point out to the hon Minister that there aren’t any psychologists in Correctional Services for him to visit. [Interjections.]

The MINISTER OF CORRECTIONAL SERVICES: Can you be one of them please? [Interjections.]

The HOUSE CHAIRPERSON (Ms C-S Botha): Hon Ellis, please …

The MINISTER OF CORRECTIONAL SERVICES: Chairperson, regarding the issue of the vacant posts, the problem is the high staff turnover, but we are trying to address that together with Public Service and Administration.

I am not going to stoop that low to comment on things that are badly run, when people will resign and what have you. I don’t think I want to stoop to that level. I am a Minister in that department and I will do my best to make sure that the department is run properly. Thank you very much. [Applause.]

Vote No 23 - Justice and Constitutional Development: Mrs S M CAMERER: Chairperson, the Justice adjustment appropriation shows a number of roll-overs totalling R238 million, mostly relating to expenditure to upgrade court operations. They were occasioned by the late approval of this expenditure just before the financial year closed at the end of March. The Auditor-General has criticised this late expenditure and commented that it increases the risk of fiscal dumping and that normal procurement practices may not have been complied with.

Can the Minister show the House that normal procurement practices were in fact complied with in these cases, and that there is nothing irregular in the way that the tenders for this equipment were awarded? Thank you.

The MINISTER FOR JUSTICE AND CONSTITUTIONAL DEVELOPMENT: Hon member, this is a question that you have put to us, which we have answered in writing and the detail will be there. I would like to affirm that we have followed proper procedures.

I would like to just say that, by and large, we have done well in the sense that we have used the money properly for capacity-building, as was primarily intended. But, most importantly, we have embarked on a very ambitious programme of modernising our courts and providing essential information technology infrastructure in our courts.

Vote No 27 - Environmental Affairs and Tourism:

Nkul M W SIBUYANA: Inkomu Mutshami wa xitulu, hikokwalaho ka 2010 leyi yi taka, ndzi kombela ku tiva leswaku endzhawulo leyi eka Tourism yi ta veka mali eka Game reserves- tindhawu ta ku londza swiharhi swa nhova- leswaku xiyimo xa vukorhokeri xi ta antswa na leswaku vanhu lava va nga kona va ta korhoka hi ku tshembeka na ku tiva leswaku va ta vuyeriwa xana? Hikuva eka sweswi hi na Khapama Game Reserve la ha Holobye wa Tourism a toloveleke ku ya kona, la ha swi tivekaka leswaku Holobye wa Swatimali u ya kona, vanhu va kona na sweswi va nh’weti va karhi va cina hikuva va nga kumi nchumu. Xana makorhokele ya vona ya ta antswisiwa ke? (Translation of Xitsonga paragraph follows.)

[Mr M W SIBUYANA: Thank you, Chairperson. I would like to know if the Department of Environmental Affairs and Tourism will, because of the coming 2010, invest money in the Game Reserves to ensure that the quality of service improves and that the employees perform their duties diligently with the knowledge that they too will benefit. Presently employees at Khapama Game Reserve, where the Ministers of Environmental Affairs and Tourism and of Finance like to hang out, have been on strike the whole month because of poor pay. Are their working conditions going to be improved?]

The MINISTER OF FINANCE: Deputy Chairperson, the question doesn’t relate directly to the adjustments and roll-overs – all the savings of the department - but I think that I’ll take responsibility for transmitting a copy of the record of the hon member’s question to Minister Van Schalkwyk and will ensure that the member is furnished with the reply. Thank you.

The HOUSE CHAIRPERSON (Ms C-S Botha): Minister, make sure that we don’t have a situation where, in a year’s time, we have another candle. Thank you. [Laughter.]

The MINISTER OF FINANCE: May I apply in advance to be the one who brings the cake. But I’ll do it by the Rules.

Vote No 28 – Housing:

Mr A C STEYN: Chairperson, out of the additional R472 million appropriation to the housing department, R372 million, that is 78%, is a roll-over amount for the N2 Gateway Project. Nobody in this House needs an introduction to the N2 Gateway Project but, since I have the floor, I’m going to give one, anyway.

In February 2005, Minister Sisulu announced the name of the winning contractor and said that the project would be fast-tracked, given top priority and that it would be a win-win situation for all. After the completion of 705 units out of the planned 22 000 units in June this year, it was reported that the costs for the 705 units were exceeded by R35 million, with claims from contractors that could amount to R116 million for, amongst other things, mismanagement of the project. Hon Minister, can you therefore inform this House as to the actual purpose of this roll-over amount of R372 million? Is it going to be used to kick- start the construction of phase 2 of the N2 Gateway Project or to cover the current claims from contractors, in which case I submit it would be fruitless expenditure?

In addition, there is also an amount of R1,13 million earmarked to fund a media campaign on the N2 Gateway Project. Can the Minister also, therefore, inform this House on what is to be achieved by this media campaign?

The MINISTER OF HOUSING: Chairperson, I thought at some point you would chip in and indicate to the member that statements are not part of what we are here for. We are here to actually answer questions. You allowed the member to go on at length and introduce a matter that has nothing to do with the question … [Interjections.]

The HOUSE CHAIRPERSON (Ms C-S Botha): Hon Minister, please take your seat.

Mr M J ELLIS: Madam Chair, on a point of order: What the hon Minister is saying is not correct. One is entitled to make a statement and to ask a question. Another point is, I wonder if the hon Minister …

The HOUSE CHAIRPERSON (Ms C-S Botha): Hon Minister, would you take your seat, please.

Mr M J ELLIS: Is the hon Minister allowed to question the Chair in that way?

The HOUSE CHAIRPERSON (Ms C-S Botha): Hon Ellis, I will respond in a way that I find fit. But I have to agree with you that you are allowed to make a statement. However, the purpose of this is actually to ask a question.

The MINISTER OF HOUSING: Chairperson, I was not questioning you in any way. I would like to think that hon Ellis perhaps might take the advice of the Minister of Correctional Services. I was just making a statement and not questioning you in any way.

However, I would like to be allowed to put the statement aside. I think that the hon member has enough time in the portfolio committee to do that and deal with the issue. I would like to say to him that the amount of money of R372 million that we are getting for the N2 Gateway Project is to ensure that people of the Western Cape are given decent accommodation. And if the hon member up to now has not woken up to the fact that there is an urgent need for housing in the Western Cape, then I think he is in the wrong portfolio committee.

I think he is in the wrong portfolio committee and I’m glad he has exposed himself now. This is a mega project and it has been explained to you over and over again. Within the dollar split that we have, there is no way we could have funded this. We’ve, therefore, requested from Treasury that we fund this in a special way, and we have been provided with that particular way.

You’ve asked about the media communication. We need to communicate with the beneficiaries. This is an essential part of dealing with housing, especially the upgrading of informal settlements. We need to ensure that we take our people and communities with us for them to understand what we are doing. We need to make sure that they are part and parcel of what we are doing.

This is what we say to you in the portfolio committee every day. If you are there, please do listen and make sure that you can put your mouth where we need to have it, because we need to make sure, on an urgent basis, that you meet your responsibilities and make sure that we get the land availability agreement from the city so that we can build forthwith. Thank you. [Applause.] [Interjections.]

The HOUSE CHAIRPERSON (Ms C-S Botha): Order please! Order please!

Mr J P I BLANCHÉ: Madam, I think it is time that Ministers replying to questions here should know that the other members of this Assembly never sit in various committees. And if a question is asked, we need to get the answer. [Interjections.]

The HOUSE CHAIRPERSON (Ms C-S Botha): Hon Blanché, that’s not for this House or me to decide. Thank you.

Vote No 29 – Land Affairs:

Mnr A H NEL: Voorsitter, verlede jaar was daar ’n totale onderbesteding in die Departement van Grondsake van R950 miljoen. Sover vanjaar is slegs 20% in die eerste ses maande van die begrote R3,37 miljard vir die herstel van grondregte bestee. As gevolg hiervan het die Minister van Finansies die begrote bedrag afwaarts aangepas met R1,1 miljard.

Dit is ’n skande dat geld wat begroot is vir so ’n belangrike saak soos grondhervorming en die herstel van grondregte nie bestee kan word nie. Soos gewoonlik is die hoofrede volgens die departement die grondeienaars wat nie wil onderhandel nie en die eisers wat nie onderlinge dispute kan oplos nie, en nie, soos die Minister van Finansies aangedui het, die gevolg van ’n regsproses nie - hy kan in sy eie boek loop kyk. Dis nie ’n rede wat hulle aangee nie! [Tussenwerpsels.]

Terwyl sommige van bogenoemde waar is, is die grootste redes swak administrasie en die bekende onvoldoende kapasiteit, maar wat maak die DG van Grondsake en die Kommissaris van Grondeise? Hulle hou geheime werkswinkels in plaas dat hulle hul werk doen. Die uiteindelike verantwoordelikheid vir hierdie departement se versuim lê egter by die agb Minister, en ek weet sy is jonk in die “job”, en ek het simpatie met haar, maar die vraag is, wat gaan u doen? Gaan u ook die blaam verskuif of gaan u aandag gee aan hierdie probleme en hulle oplos? [Tussenwerpsels.] (Translation of Afrikaans paragraphs follows.)

[Mr A H NEL: Chairperson, last year there was a total underspending of R950 million in the Department of Land Affairs. So far this year only 20% of the budgeted R3,37 billion has been spent on land reform in the first six months of the year. As a result, the Minister of Finance has adjusted the budgeted amount downward with R1,1 billion.

It is a disgrace that money that has been budgeted for such an important matter as land reform and restitution cannot be spent. As usual, the main reason given for this by the department is the landowners who do not want to negotiate and the claimants who cannot resolve mutual disputes, and not, as the Minister of Finance indicated, because of legal proceedings – he can go and consult his own book. This is not the reason that they are giving! [Interjections.]

While some of the above-mentioned is true, the main reasons are bad administration and the well-known insufficient capacity, but what are the DG of Land Affairs and the Commissioner of Land Claims doing? They are holding secretive workshops instead of doing their job. However, the ultimate responsibility for this department’s neglect rests upon the hon Minister, and I know that she is new to the job, and I have sympathy with her, but the question is, what are you going to do? Are you also going to shift the blame or are you going to address these issues and solve them? [Interjections.]]

UMPHATHISWA WEZOLIMO NEMICIMBI YOMHLABA: Sihlalo, obekekileyo okaNel undichazele ukuba uza kuthetha ngelakowabo ulwimi. Nam ke ndakwenjenjalo ukuphendula ndisebenzise olwakowethu ulwimi ukwenzela ukuba sivane kakuhle ngokugqibeleleyo. Okokuqala ke mandithi, njengokuba ebesele etshilo uMhlekazi, uMphathiswa wezeZimali uManuel, ndibulela kakhulu kuye ukuba aye wayicacisa le nto, kodwa ke ndiza kuphinda ngoba kukho abangena ndlebe. Bakhona abaziibhodi ngeendlebe. (Translation of isiXhosa paragraph follows.)

[The MINISTER FOR AGRICULTURE AND LAND AFFIARS: Chairperson, hon Nel has indicated to me that he is going to speak his own language. I will also respond using my own language, so that we can understand each other fully. Firstly, let me say, as the hon Manuel, Minister of Finance, has mentioned, I thank him very much because he has explained this issue, but I will repeat, because there are those who do not have ears. There are those who turn a deaf ear.]

This financial year, the department has taken a historic decision to declare and surrender funds requested under the restitution programme in the adjustments estimates. This is due to various reasons, such as protracted negotiations with landowners, which delay the settlement of claims and land purchases.

Asinakubanceda ke abantu abangafuni nguquko kweli lizwe, nabathatha ixesha labo. [We cannot help people who do not want transformation in this country, and those who take their time.]

Community and traditional leadership disputes, which contribute to delays in deciding the restitution option in processing the claims, high staff turnover resulting in capacity constraints, and development planning taking longer than the settlement processes, are all issues that need attention.

Uyakukhumbula ke okaNel ukuba umcimbi wophuhliso uthatha ixesha elide, kuba kaloku sine lifa lokuba abantu bakuthi bangabinawo lamakhono. Baza kuthatha ixesha ukuba bade baqeqesheke, baze bakwazi ukwenza isicwangciso seshishini, kunye nazo zonke ezinye izinto ezifunwayo ngabantu abakhumshileyo. Kodwa ke siyazama ke, sisitsho ukuthi, iyakhawulezisa ke le nkqubo. Siyenzile iminyenyevu ethile kwimithetho eluqilima karhulumente ukwenzela ezi zicelo zikhawuleze zenziwe.

Ucweyo olu lona asoze singabinalo ngoba kaloku yimfundo leyo, kukuthyila ingqondo, nokuphuhliswa kwabantu bakowethu. Abaphucukileyo ke bona abantu, abaziphuhlisa bodwa ngela xesha lengcinezelo, abaludingi olu cweyo ngoko ke mabamyeke urhulumente aqhubele phambili ngomsebenzi wakhe wokuphuhlisa abantu. Ndiyabulela. [Kwaqhwatywa.] (Translation of isiXhosa paragraphs follows.)

[Hon Nel will remember that development takes a long time, since our people do not have the skills. They will take time in order to acquire the training so that they are able to draw up business plans, and all other necessities required by the elite people. We are trying; we would also like to say the process is moving fast. We have relaxed some of the government’s stringent laws in order to allow an opportunity for the fast processing of these applications.

We will not stop holding workshops because those are lessons that open our mind and develop our people. The elite who developed themselves during the apartheid era do not need this workshop; therefore they must allow the government to continue the programme of developing people. Thank you. [Applause.]]

Vote No 33 – Transport:

Mr S B FARROW: Chair, before I start, I noticed that the Minister is not here. Can I just establish, without taking time, as to whether there is going to be a response?

The HOUSE CHAIRPERSON (Ms C-S Botha): There is a Minister who will answer you – the Minister of Finance.

Mr S B FARROW: To the Minister of Finance, a couple weeks ago, if you were in the House, I actually questioned the Minister about the Taxi Recapitalisation Programme. I also indicated to him that, clearly, there were some communication problems with Santaco – the SA National Taxi Council - which he said he was regularly in contact with. I think the strike that we had recently just reiterated the resistance on the ground to a lot of this recapitalisation.

Over R1 billion has been earmarked for this programme over the Medium-Term Expenditure Framework and yet the department is still rolling over funds in implementation of this. They have clearly indicated that R150 million has been put aside for extra appropriation to purchase the NTVs - the new taxi vehicles - whilst at the same time expecting these taxi owners to pay VAT. In fact, what we are doing is robbing Peter to pay Paul.

What I would like to know, Minister, is this: Is it not time to transform this current transport service from being operator controlled commuter- based unimodal routes to user-friendly publicly controlled and fully integrated mass-rapid transport networks, as was outlined in the current department’s latest draft strategy, and move away from the senseless and inequitable one of expenditures, such as the taxi recapitalisation and the Gautrain, towards a corridor by corridor intermodal transport initiative, in accordance with the integrated transport plans that have been done in accordance with the law at the various metros and municipalities? And what money has now been put aside for those particular purposes? I thank you.

The MINISTER OF FINANCE: I was merely going to suggest that the hon Cronin is doing his propaganda work. [Laughter.]

The MINISTER OF PUBLIC WORKS: Hon Chairperson, and hon member that was not supposed to be the answer to the question. You would appreciate that the other issues that you have raised are indeed matters of policy that might need to be discussed in the committee. However, with regard to the issue of taxi recapitalisation, it is on course. As you know, the Department of Transport is launching National Transport Month and they have started with the scrapping in Botshabelo.

If I could just clarify, Santaco, indeed, is in discussions with the Minister. Even the NTA, which is the organisation that called the strike, has been in discussions with the Minister. Obviously they may be disaffected by the implementation and the Minister has openly said that he will continue to engage them, but that is not going to stop the process.

You will appreciate that the delay in the start of the implementation was in the interest of ensuring that, through broader consultation, everybody would buy in and the process would be undertaken. Therefore, as government, we do appreciate that that was necessary. It might have caused the delay. The roll-over that has been allocated is actually taking into consideration the number that we are likely to have in terms of the scrapping. Therefore that is why the resources have been made available for that purpose.

I will ensure that I report to the Minister of Transport that you have some interest in the public transport system, viz how it must be organised, be aligned with the IDPs, be intermodal and everything else that you have said. I will take that to him. As for the question on the recapitalisation, I think I have answered you adequately. I thank you very much, hon member.

Vote No 34 – Water Affairs and Forestry:

Mr M W SIBUYANA: Chairperson, in places where there has been vandalism of infrastructure, I would like to know if the department is going to pay out money in order to repair such vandalised infrastructures to enable vandals to continue vandalising? Or is the department going to withdraw some funding in order to punish the people who are being punished by vandals?

The MINISTER OF WATER AFFAIRS AND FORESTRY: Chairperson, the best I could do here is to ask my colleague, the Minister of Safety and Security, to deal with the vandals. As far as the vandals are concerned, I do not think that we can allocate money for vandalism. The money that is allocated for infrastructure in this mini budget is money for infrastructure that was damaged by floods, both in the Western Cape as well as in the Eastern Cape, and not money for vandalism. I thank you.

Discussion on Votes and Schedule concluded.

Vote No 1 – The Presidency – put and agreed to (Democratic Alliance dissenting).

Vote No 2 – Parliament – put and agreed to.

Vote No 3 – Foreign Affairs – put and agreed to.

Vote No 4 – Home Affairs – put and agreed to (United Party of South Africa dissenting).

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

Vote No 6 – Public Works – put and agreed to.

Vote No 7 – Government Communication and Information System – put and agreed to.

Vote No 8 - National Treasury – put and agreed to. Vote No 9 – Public Enterprises – put and agreed to.

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

Vote No 11 - Public Service Commission - put and agreed to.

Vote No 12 - SA Management Development Institute – put and agreed to.

Vote No 13 – Statistics South Africa – put and agreed to.

Vote No 14 – Arts and Culture – put and agreed to.

Vote No 15 – Education – put and agreed to.

Vote No 16 – Health – put.

Mr S SIMMONS: Madam Chair, the UPSA has objections.

The HOUSE CHAIRPERSON (Ms C-S Botha): Thank you, an objection having been raised, I now put the question. Those in favour will say Aye and those against will say No. I think I can say that the Ayes have it. Sir, would you like your objections to be noted?

Mr S SIMMONS: Please, ma’am.

Agreed to (United Party of South Africa dissenting.)

The DEPUTY CHIEF WHIP OF THE MAJORITY PARTY: Chairperson, I would just like to make a procedural suggestion: The hon member can, at the outset, indicate that he wishes to have his objections noted. I don’t think we would then have to go through the process of asking for Ayes and Noes and so on.

The HOUSE CHAIRPERSON (Ms C-S Botha): Thank you for that suggestion.

Vote No 17 – Labour – put and agreed to (United Party of South Africa dissenting).

Vote No 18 – Social Development – put and agreed to.

Vote No 19 – Sport and Recreation South Africa – put and agreed to.

Vote No 20 – Correctional Services – put.

Division demanded.

The House divided:

AYES - 224: Abram, S; Ainslie, A R; Anthony, T G; Arendse, J D; Asmal,A K; Balfour, B M N; Baloyi, M R; Beukman, F; Bhamjee, Y S; Bhengu,F; Bhengu, P; Bhoola, R B; Bloem, D V; Bogopane-Zulu, H I; Botha,N G W; Burgess, C V; Carrim,YI; Cele,MA; Chalmers, J; Chohan-Khota,F I; Combrinck, J J; Cronin, J P; Cwele, S C; Dambuza, B N; Diale, L N;Didiza, AT; Dikgacwi, M M; Dithebe, S L; Ditshetelo, P H K; Dlali, D M;Doidge, G Q M; Du Toit, D C; Erwin, A; Fihla, N B; Fraser-Moleketi, G J;Frolick, C T; Fubbs, J L; Gabanakgosi, P S; Gaum, A H; Gigaba, K M N;Gololo, C L; Gumede, DM; Gumede,MM; Hanekom, DA; Hangana, N E;Hendricks, L B; Holomisa, S P; Huang, S; Jacobus, L; Johnson, C B;Johnson, M; Jordan, Z P; Kalako, M U; Kasienyane, O R; Khoarai, L P;Kholwane, S E; Khumalo, K K; Khumalo, K M; Khunou, N P; Komphela,B M; Kota, Z A; Kotwal, Z; Landers, L T; Lekgetho, G; Lekota, M G P;Lishivha, T E; Louw, J T; Louw, S K; Ludwabe, C I; Mabandla, B S; Mabe,L L; Mabena, D C; Madella,AF; Maduma, L D; Madumise, M M; Magau,K R; Magubane, N E; Magwanishe, G B; Mahlangu-Nkabinde, G L;Mahlawe, N M; Mahomed, F; Mahote, S; Maine, M S; Makasi, X C;Makgate, M W; Malahlela, M J; Maloney, L; Maloyi, P D N; Maluleka,H P; Manana,MNS; Manuel, TA; Mapisa-Nqakula, N N; Martins, B A D;Mashangoane, P R; Mashiane, LM; Mashigo, R J; Mashile, B L; Masutha,T M; Mathebe, P M; Mathibela, N F; Matlala, M H; Matsemela, M L;Matsomela, M J J; Maunye, M M; Mayatula, S M; Mbete, B; Mbili, M E;Mbombo, N D; Mentor, M P; Mfundisi, I S; Mkhize, Z S; Mlangeni, A;Mnguni, B A; Moatshe, M S; Modisenyane, L J; Mofokeng, T R; Mogale,O M; Mogase, I D; Mohamed, I J; Mohlaloga, M R; Mokoena, A D;Molefe, C T; Moleketi, P J; Moloto, K A; Montsitsi, S D; Moonsamy, K;Morobi, D M; Morutoa, M R; Morwamoche, K W; Mosala, B G; Moss,L N; Moss, M I; Motubatse-Hounkpatin, S D; Mpahlwa, M B; Mshudulu,S A; Mthethwa, E N; Mufamadi, F S; Mzondeki, M J G; Nawa, Z N;Ndzanga, RA; Nel,AC; Nene,MJ; Nene, NM; Newhoudt-Druchen,W S;Ngaleka, E; Ngcengwane, N D; Ngcobo, E N N; Ngcobo, N W; Ngculu,L V J; Ngele, N J; Ngwenya, W; Nhlengethwa, D G; Njobe, M A A;Nkabinde, N C; Nkem-Abonta, E; Nkuna, C; Nogumla, R Z; Nqakula, C;Ntombela, S H; Ntuli, M M; Ntuli, R S; Nwamitwa- Shilubana, T L P;Nxumalo, M D; Nxumalo, S N; Nyambi, A J; Nzimande, L P M; Olifant,D A A; Oosthuizen, G C; Padayachie, R L; Pandor, G N M; Pieterse, R D;Pule, B E; Radebe, B A; Rajbally, S; Ramakaba-Lesiea, M M; Ramgobin,M; Ramodibe, D M; Ramotsamai, C P M; Rasmeni, S M; Reid, L R R;Saloojee, E; Schippers, J; Schneemann, G D; Schoeman, E A; Seadimo,M D; Sefularo, M; Sekgobela, P S; September, C C; Shabangu, S; Sibande,M P; Siboza, S; Sigcau , S N; Sikakane,MR; Sisulu, LN; Skhosana,W M;Skweyiya, Z S T; Smith, V G; Solo, BM; Solomon, G; Sonjica, B P; Sonto,M R; Sosibo, J E; Sotyu, M M; Surty, M E; Thomson, B; Tinto, B; Tlake,M F; Tolo, L J; Tsenoli, S L; Tshivhase, T J; Tshwete, P; Turok, B; Vadi, I;Van den Heever, R P Z; Van der Merwe, S C; Van Wyk, A; Vundisa, S S;Wang, Y; Woods, G G; Xingwana, L M; Xolo, E T; Yengeni, L E; Zita, L;Zulu, B Z.

NOES - 41: Blanché, J P I; Camerer, S M; Coetzee, R; Cupido, H B;Davidson, I O; Delport, J T; Doman,WP; Dudley, C; Ellis, M J; Farrow, S B; Gibson, D H M; Jankielsohn, R; Joubert, L K; Julies, I F; Kalyan, S V; Kohler- Barnard, D; Labuschagne, L B; Lowe, C M; Masango, S J; Minnie, K J; Morgan, G R; Nel,AH; Opperman, S E; Rabie, P J; Sayedali-Shah, M R; Schmidt, H C; Selfe, J; Semple, J A; Seremane, W J; Simmons, S; Smuts, M; Stephens, J J M; Steyn, A C; Swart, P S; Swart, S N; Swathe, M M; Trent, E W; Van der Walt, D; Van Dyk, S M; Waters, M; Weber, H.

ABSTAIN - 14: Bekker, H J; Bhengu, M J; Biyela, B P; Chang, E S; Dhlamini, BW; Mpontshane,AM; Rabinowitz, R; Roopnarain, U; Seaton, S A; Sibuyana, MW; Smith, P F; Zikalala, C N Z; Zondi, K M; Zulu, N E.

Vote accordingly agreed to.

Vote No 21 – Defence – put and agreed to.

Vote No 22 – Independent Complaints Directorate – put and agreed to.

Vote No 23 – Justice and Constitutional Development – put and agreed to.

Vote No 24 – Safety and Security – put and agreed to (United Party of South Africa dissenting).

Vote No 25 – Agriculture – put and agreed to.

Vote No 26 – Communications – put and agreed to.

Vote No 27 – Environmental Affairs and Tourism – put and agreed to.

Vote No 28 – Housing – put and agreed to.

Vote No 29 – Land Affairs – put.

Division demanded.

The House divided:

AYES - 243: Abram, S; Ainslie, A R; Anthony, T G; Arendse, J D; Asmal, A K; Balfour, B M N; Baloyi, M R; Bekker, H J; Beukman, F; Bhamjee, Y S; Bhengu, F; Bhengu, M J; Bhengu, P; Bhoola, R B; Biyela, B P; Bloem, B V; Bogopane-Zulu, H I; Botha, N G W; Burgess, C V; Cachalia, I M; Carrim, Y I; Cele, MA; Chalmers, J; Chang, E S; Chohan-Khota, F I; Combrinck, J J; Cronin, J P; Cupido, H B; Cwele, S C; Dambuza, B N; Dhlamini, B W; Diale, L N; Didiza, A T; Dikgacwi, M M; Dithebe, S L; Ditshetelo, P H K; Dlali, D M; Doidge, G Q M; Du Toit, D C; Dudley, C; Erwin, A; Fihla, N B; Fraser- Moleketi, G J; Frolick, C T; Fubbs, J L; Gabanakgosi, P S; Gaum, A H; Gigaba, K M N; Gololo, C L; Gumede, D M; Gumede, M M; Hanekom, D A; Hangana, N E; Hendricks, L B; Hendrickse, P A C; Holomisa, S P; Huang, S; Jacobus, L; Johnson, C B; Johnson, M; Jordan, Z P; Kalako, M U; Kasienyane, O R; Khoarai, L P; Kholwane, S E; Khumalo, K K; Khumalo, K M; Khunou, N P; Komphela, B M; Kota, Z A; Kotwal, Z; Landers, L T; Lekgetho, G; Lishivha, T E; Louw, J T; Louw, S K; Ludwabe, C I; Mabandla, B S; Mabe, L L; Mabena, D C; Madella, A F; Maduma, L D; Madumise, M M; Magau, K R; Magubane, N E; Magwanishe, G B; Mahlangu-Nkabinde, G L; Mahlawe, N M; Mahomed, F; Mahote, S; Maine, M S; Makasi, X C; Makgate, M W; Malahlela, M J; Maloney, L; Maloyi, P D N; Maluleka, H P; Manana, M N S; Manuel, T A; Mapisa-Nqakula, N N; Martins, B A D; Mashangoane, P R; Mashiane, LM; Mashigo, R J; Mashile, B L; Masutha, T M; Mathebe, P M; Mathibela, N F; Matlala, M H; Matsemela, M L; Matsomela, M J J; Maunye, M M; Mayatula, S M; Mbete, B; Mbili, M E; Mbombo, N D; Mentor, M P; Mfundisi, I S; Mkhize, Z S; Mlangeni, A; Mnguni, B A; Moatshe, M S; Modisenyane, L J; Mofokeng, T R; Mogale, O M; Mogase, I D; Mohamed, I J; Mohlaloga, M R; Mokoena, A D; Molefe, C T; Moleketi, P J; Moloto, K A; Montsitsi, S D; Moonsamy, K; Morobi, D M; Morutoa, M R; Morwamoche, K W; Mosala, B G; Moss, L N; Moss, M I; Motubatse-Hounkpatin, S D; Mpahlwa, M B; Mpontshane, A M; Mshudulu, S A; Mthethwa, E N; Mufamadi, F S; Mzondeki, M J G; Nawa, Z N; Ndzanga, R A; Nel, A C; Nene, M J; Nene, N M; Newhoudt-Druchen, W S; Ngaleka, E; Ngcengwane, N D; Ngcobo, E N N; Ngcobo, N W; Ngculu, L V J; Ngele, N J; Ngwenya, W; Nhlengethwa, D G; Njobe, M A A; Nkabinde, N C; Nkem-Abonta, E; Nkuna, C; Nogumla, R Z; Nqakula, C; Ntombela, S H; Ntuli, M M; Ntuli, R S; Nwamitwa-Shilubana, T L P; Nxumalo, M D; Nxumalo, S N; Nyambi, A J; Nzimande, L P M; Olifant, D A A; Oosthuizen, G C; Padayachie, R L; Pandor, G N M; Pieterse, R D; Pule, B E; Rabinowitz, R; Radebe, B A; Rajbally, S; Ramakaba-Lesiea, M M; Ramgobin, M; Ramodibe, D M; Ramotsamai, C P M; Rasmeni, S M; Reid, L R R; Roopnarain, U; Saloojee, E; Schippers, J; Schneemann, G D; Schoeman, E A; Seadimo,MD; Seaton, S A; Sefularo, M; Sekgobela, P S; September, C C; Shabangu, S; Sibande, M P; Siboza, S; Sibuyana, M W; Sigcau, S N; Sikakane, M R; Simmons, S; Sisulu, L N; Skhosana, W M; Skweyiya, Z S T; Smith, P F; Smith, V G; Solo, B M; Solomon, G; Sonjica, B P; Sonto, M R; Sosibo, J E; Sotyu, M M; Surty, M E; Swart, S N; Thomson, B; Tinto, B; Tlake,MF; Tolo, L J; Tsenoli, S L; Tshivhase, T J; Tshwete, P; Turok, B; Vadi, I; Van den Heever, R P Z; Van der Merwe, S C ;VanWyk, A; Vundisa, S S; Wang, Y; Woods, G G; Xingwana, L M; Xolo, E T; Yengeni, L E; Zikalala, C N Z; Zita, L; Zondi, K M; Zulu, B Z; Zulu, N E.

NOES - 37: Blanché, J P I; Camerer, S M; Coetzee, R; Davidson, I O; Delport, J T; Doman, W P; Ellis, M J; Farrow, S B; Gibson, D H M; Jankielsohn, R; Joubert, L K; Julies, I F; Kalyan, S V; Kohler-Barnard, D; Labuschagne, L B; Lowe, C M; Masango, S J; Minnie, K J; Morgan, G R; Nel, A H; Opperman, S E; Rabie, P J; Sayedali-Shah, M R; Schmidt, H C; Selfe, J; Semple, J A; Seremane, W J; Smuts, M; Stephens, J J M; Steyn, A C; Swart, P S; Swathe,MM; Trent, EW;Van derWalt, D;Van Dyk, S M; Waters, M; Weber, H.

Vote accordingly agreed to.

Vote No 30 – Minerals and Energy – put and agreed to.

Vote No 31 – Science and Technology – put and agreed to.

Vote No 32 – Trade and Industry – put and agreed to.

Vote No 33 – Transport – put and agreed to.

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

Schedule agreed to.

                   ADJUSTMENTS APPROPRIATION BILL

                       (Second Reading debate)

There was no debate.

Bill read a second time.

                     REVENUE LAWS AMENDMENT BILL

                       (First Reading debate)


                 REVENUE LAWS SECOND AMENDMENT BILL


                       (Second Reading debate)

Mr N M NENE: Madam Chairperson, hon members, when the Minister of Finance tabled the Budget in February this year, he announced a number of tax amendments ranging from reduction in tax rates to more substantive adjustments that require this legislative process to give effect to. When he tabled this Bill a week ago, the Minister said, and I quote:

This Bill mainly contains fiscal stimulus measures designed to accelerate economic growth as well as ongoing measures to broaden the tax base so that all our citizens pay their fair share.

[Interjections.]

The HOUSE CHAIRPERSON (Ms C-S Botha): Order! Hon members, please allow Mr Nene to be heard.

Mr N M NENE: I don’t blame members, Madam Chairperson. At this time of the day we all get rowdy. The major amendments … [Interjections.]

Mr M J ELLIS: Madam Chair, is the hon member suggesting that he wouldn’t like to make a speech, because we would be very happy about that? [Laughter.]

The HOUSE CHAIRPERSON (Ms C-S Botha): I doubt that very much.

Mr N M NENE: I wouldn’t do anything that would make the hon Ellis happy. If it makes him happy, then I actually will not do it.

Firstly, regarding research and development incentives, this is in line with the national research and development strategy adopted by South Africa in 2002, which set the target for research and development spending at 1% of GDP, increasing it over time to 2%.

The main objective is to encourage research and development in order to make local business more innovative and competitive, especially in the field of engineering, medical and health sciences, agriculture, and mathematical and chemical sciences.

This increases the deductible amount from 100% to 150%, and allows for a depreciation allowance for research-and-development-related capital expenditure to be written off over three years, as opposed to four years, with a new formula of 50:30:30 instead of 40:20:20:20.

With regard to employee bursaries, this is to support the skills drive in the country in order to address the mismatch between employer needs and employee skills, which has been identified as a major constraint in our Accelerated and Shared Growth Initiative for South Africa.

SMME relief reduces the onerous burden of withholding tax on clients of SMMEs and introduces a standard flat rate of 34% for personal service entities that can also be reduced on receipt of a Sars directive - another attempt to promote small business development in pursuit of the people’s dream of sharing in the country’s wealth.

With regard to co-operatives, in line with the recently promulgated Co- operatives Act of 2005, appropriate relief is accorded to these co- operatives, as we know that they serve as an important vehicle to bridge the gap between the first and the second economies.

The Income Tax Act is amended so that co-operatives can qualify for small business relief, such as the graduated tax regime of 0% to 10% and ultimately 29%, and also 100% depreciation and many others.

The Bill also covers a lot more amendments, and my colleagues will be speaking on some of these in more detail. The ones I have not spoken about include the following: the upstream oil and gas incentives; the mining rehabilitation closure fund; the retirement funds; public benefit organisations; recreational clubs; taxation of government entities; traditional communities; tax treatment of government grants; tax recapitalisation allowance exemption; the general anti-avoidance rule, which will be covered by the other members; and then the Fifa World Cup guarantees relating to taxation.

The process of drafting this legislation, even though technical, is one of the most consultative, informed by the People’s Charter which states that the people shall govern, meaning that they shall elect a government, but further that they shall also participate in determining how they shall be governed.

These consultative processes have seen National Treasury and the SA Revenue Service releasing discussion documents, and have consultative forums with stakeholders. Public comment is taken into account even before Parliament affords the stakeholders the platform to express their views where the final product gets the stamp of interim approval, and ultimately comes to this House for final consideration and approval.

The portfolio committee, having considered all submissions and responses, has endorsed this Bill and now presents it to this House for approval. The ANC supports the Revenue Laws Amendment Bill, 2006. I thank you. [Applause.]

Mr I O DAVIDSON: Madam Deputy Chair, the Revenue Laws Amendment Bill is an omnibus piece of legislation arising out of policy changes announced by the Minister of Finance at the time of the Budget and from the need to close certain tax loopholes or revise pieces of tax legislation to allow for incentives, relief, refinements, etc.

The amendments that are perhaps of greatest current public interest are those which give effect to arrangements and guarantees granted to Fifa as part of South Africa’s bid to host the 2010 World Cup. These amendments include giving effect to the concept of a tax-free bubble in respect of any profitable goods sold or services rendered within certain designated sites during the course of the World Cup.

Other amendments relate to other taxes, duties and levies that Fifa, its subsidiaries and associates, as well as other specified categories of organisations would normally attract as a result of their activities in South Africa over the period. We clearly welcome and support these amendments and see them as a further step exhibiting our ability to host a highly successful event.

What is also welcomed are the refinements to the taxes relating to public- benefit organisations which address certain anomalies in respect of trading and housing activities, as well as extending the list of activities eligible for tax-deductible donations to conservation and environmental and animal welfare public voluntary organisations, PVOs. Welcome changes are also made in respect of the liberalisation of the investment regime of PVOs as well as the capital gains on the disposal of PVO assets.

Less welcome to recreational clubs will be the realignment of the tax regime applicable to clubs to that of PVOs. Currently, clubs are exempt from income tax. However, many of them carry on sizeable trading activities to raise funds in addition to membership contributions. The amendments now provide for the partial taxation of such clubs to take account of these profit-making activities.

The new legislation around the general anti-avoidance rule is one which has attracted much debate by the tax profession. While tax evasion is illegal and must be frowned upon, it is clearly legitimate for taxpayers to minimise their tax obligations.

Now, while it is acknowledged that the substance of the amendments before us has changed considerably since their initial introduction as a result of industry comment, a major reservation still exists in relation to those aspects of the change which relate to the increased power of the commissioner, the bypassing of the large body of South Africa common law relating to avoidance, and the importation of, in particular, United States avoidance terminology, which is supported by United States case law but which has no applicability to ourselves. Of particular reference are the measures related to commercial substance in respect of impermissible tax- avoidance arrangements.

It is hoped that the commissioner will tread lightly in this respect and that further consultation with the industry will take place in order that an acceptable way forward is reached. Notwithstanding our reservations in this regard, we support the Bill. Thank you.

Mr H J BEKKER: Madam Chair, there are three aspect of the Revenue Laws Amendment Bill that I would like to highlight, which are particularly pleasing and worthy of support.

Firstly, the Bill provides that the newly created regional electricity distributors, the so-called Reds, will continue to be tax exempt until at least 2014 as a transitional provision to ensure that consolidation of the electricity distribution industry may continue without hindrance of tax complexities. Of course, once restructuring is complete, electricity distribution will, in terms of the existing tax rules, be fully taxed.

Secondly, as part of South Africa’s commitment to host the 2010 Soccer World Cup, it is self-evident that Fifa should be given special tax treatment for a variety of goods and services. The creation of a tax bubble, or a tax-free bubble, provided for in this Bill is extended to income tax and VAT only.

The IFP welcomes the fact that no other taxes are being waived and that the tax-free bubble will only apply to Fifa-designated sites and for specific periods only. These proposals give effect to the government’s guarantees extended to Fifa during the bidding process and to the right to host the tournament, and they are supported.

Thirdly, the Bill clarifies the general anti-avoidance rule, the so-called GAAR, by proposing a new rule to deal with impermissible avoidance arrangements. The IFP hopes that the new rule will prove to be a consistent and effective deterrent to deal with sophisticated forms of tax avoidance, something our country can ill afford. In addition, the new GAAR takes cognisance of international developments, bringing South Africa up to date and in line with such developments.

I will make the House happy by saving them one minute. The IFP will support the Revenue Laws Amendment Bill. Thank you. [Applause.]

The HOUSE CHAIRPERSON (Ms C-S Botha): Thank you very much for that. I believe the hon Harding is not in the House either, so he’s saving another minute. I now call the hon Mbili.

Mr M E MBILI: Madam Chair, hon members, colleagues and comrades, today we mark yet another milestone in our history. This debate is informed by the desire on the part of the ANC-led government to improve the efficiency of the tax regime and, in the process, stimulate the economy.

I will attempt to highlight a few key proposals in the Bill, the first being relief for small business co-operatives. But, before I do so, I need to use this opportunity to take my hat off to the Zamani co-operatives in Shobashobane on the lower south coast of KwaZulu-Natal, which is where I come from.

As we are all gathered here, we should remember very vividly the event of 25 December 1995. This is a time when we are supposed to sit down and relax. Most of us take Christmas as a chance to spend quality time with our family. On that day we were called upon to rush to that area to do nothing else but collect the bodies of dead people.

I am happy today to announce that in that area of Shobashobane people have tried, under very trying circumstances, to put their past behind them, ugly as it may be. They believe in the slogan that “Yesterday was bad; yesterday was ugly; but today we have hope, we have a future, and tomorrow will be better than today.”

In trying to bridge the gap between the first and second economies, it is very important to note that co-operatives are now eligible for small tax incentives. Before this amendment, co-operatives were taxed at 29%. Depending on their income threshold, co-operatives are now eligible for tax rates of 0%, 10% or 29%. This can only be good news for the historically disadvantaged people that were systematically excluded from the mainstream economy caused by the repressive laws of apartheid.

I believe that we should all applaud the ANC-led government, particularly the Treasury, on their resolve to handle this economic exclusion very well.

Siyazi bakwethu ukuthi lapha ngaphandle bekuthi uma umuntu wakithi enesitolo avele adayise ushukela nempuphu, agcine lapho. Ngikwazi kahle lokho ngoba ngiphuma kuleso simo. (Translation of isiZulu paragraph follows.)

[Hon members, we all know that in this country whenever a person owns a shop he could afford to sell only sugar and mealie meal, and it ends there. I know this very well because I come from the same situation.]

This government, in trying to address that imbalance, came up with the innovative strategy of co-operatives. I say this because the Zamani co- operative today is up and running. It is run by young, enthusiastic and focused men of that rural area. Today they are manufacturing toilet paper. Recently, they secured a tender. I am not going to tell you the amount because I must protect them. They have just secured a tender to supply the department of health in KwaZulu-Natal – the Port Shepstone Hospital - with toilet paper. That is an innovation and that is what we are taking about. [Applause.]

This co-operative intervention – a strategy of the ANC-led government - has worked, because it has given people the hope that there is a future in this country. I could quote, if time allowed me, the many ways it has done this.

Secondly, I want to touch on the incentive for employee scholarships and bursaries. All scholarships and bursaries for employees will be tax exempt, regardless of whether or not there are elements of salary sacrifice. The denial of employer deductions for scholarship and bursary payments, acting as a salary sacrifice, will be removed. Owing to the current high cost of education in our country, an inflationary adjustment was made to the R2 000 relief limit of scholarships granted to relatives of employees. The new limit is now R3 000.

This is yet more good news for the future of our country, because it will afford an opportunity of a lifetime to those South Africans who for some or other reason cannot access the doors of learning and training. We should all support the progressive initiatives taken by our government, such as Asgisa, to bring about the skills much needed to stimulate our economy. Therefore the employee scholarship and bursary incentive should be welcomed by all South Africans.

Lastly, I need to touch on retirement fund withdrawals. Previously, retirement annuity funds were not allowed to pay any amount prior to members reaching the age of 55, for the purpose of ensuring that the money was preserved until retirement. This argument was informed by the need to encourage members of retirement funds to invest enough money to take care of their needs during the later years of their lives. But there was fear on the part of those who earned too little to invest, hence their reluctance to invest. One can only hope that this incentive will encourage more investors.

Governor Tito Mboweni has registered his concern about the low level of savings in this country, which has a detrimental effect on the inflation and interest rates. He argues that this is not good for the future of the economy and the country. Now, members of retirement annuity funds may withdraw certain amounts from their funds, as determined by the Minister of Finance.

Lastly, as part of the bid to host the 2010 Fifa World Cup, the South African government issued various guarantees to Fifa. These guarantees envisage that the profits of goods and services provided at Fifa sites are not subject to South African tax. Certain imports designated for Fifa purposes will be free from import tax. Fifa and its subsidiaries and participating national associations, excluding Safa, are generally exempt from liabilities in respect of all South African tax.

Again, this is part of our government’s endeavour to host the best- organised Fifa World Cup ever in 2010. I think we should give applause for that. [Applause.] This is because we, the rest of South Africa and football- loving countries all over the world, welcome the commitment by President Mbeki and his government to invest approximately R15 billion to build stadiums and related infrastructure to make sure that we successfully host the World Cup event in a manner that has never been seen before.

We note with great concern the prophets of doom that are worried that investments regarding the 2010 World Cup will become white elephants after the World Cup. I have a word for them: South Africa is a soccer-loving nation. Soccer for many young South Africans is a fantasy. This can only boost their ego and encourage them to resist the temptation to do bad things like drugs. I thank you. [Time expired.] [Applause.]

Mr R B BHOOLA: Chairperson, a number of Acts are amended in this Bill, all of which are supported by the MF. It is, however, crucial that these amendments are made public beyond the normal Gazette to ensure the public’s knowledge of these changes and procedures that may be applicable to them. It is, however, the tax provisions that most are interested in. We are pleased that the Bill serves to clarify the tax threshold and issues pertaining to capital tax gains. Further input tax deduction claims arenas certainly bring a smile to many.

We are most pleased that the Bill has inculcated concerns about taxes pertaining to recreational clubs of the 2010 Fifa World Cup. It is best to estimate costs of this nature at this early stage so that the necessary entities may be aware so that they act in accordance with requirements in this regard. The further management of mining rehabilitation funds provided for is found beneficial to the long-term efficiency of the sector.

I want to endorse the sentiments of the previous speaker - we don’t just want to be any country that hosts the 2010 event. We simply want to be the best.

The MF will support the Revenue Laws Amendment Bill. Thank you.

Dr S M VAN DYK: Chairperson, the Revenue Laws Amendment Bill of 2006 introduces amendments to numerous tax, insurance, revenue, transfer and estate duty Acts.

This reform continues to ensure greater equity, it broadens the tax base and lowers the tax compliance burden. It also enhances tax collection efficiency and makes provision for the implementation of the tax proposals contained in the 2006 Budget. This entails 33 major and minor tax deduction and technical amendments to different sorts of tax legislation.

Daar is egter kommer ten opsigte van die wetgewing wat belastingverligting betref vir navorsing en ontwikkeling, as net een van die vele wysigings op die voorgestelde wetgewing. Alhoewel navorsingsaktiwiteite risiko-gebonde is met ‘n hoë koste-element en resultate nie altyd verseker is nie, moet ons besef dat navorsing ’n groot bydrae lewer om produktiwiteit te verhoog deur middel van tegnologiese bevorderings.

Navorsing stimuleer ook ekonomiese groei en bevorder die geskooldheid van die werkerskorps. Die resultaat van navorsing impliseer ook dat die skaars hulpbronne meer effektief ontgin en benut word. Wetenskaplike navorsingsbevindings kan ook ’n land op die agenda van internasionale wetenskaplike mededinging plaas.

In dié verband kan ons verwys na die mediese navorsing wat gelei het tot die eerste hartoorplanting in Suid-Afrika, Krygkor se wapennavorsing, Pelindaba se atoomenergienavorsing, die WNNR se rol in tegnologiese ontwikkeling en Onderstepoort se veeartsenydienste.

Kundiges beweer egter dat volgens tegnologiese omwentelings die ekonomie en samelewing ná ’n 100 jaar op net 10% van die vorige eeu se tegnologiese gebruiklikhede funksioneer, terwyl die ander 90% op nuwe wetenskaplike uitvindings gebaseer is. Daarom is wetenskaplike navorsing van kardinale belang.

Om die private sektor nou aan te spoor om navorsing te bevorder is die DA van mening dat die wet gewysig behoort te word sodat alle uitgawes sonder voorwaardes wat aangegaan word vir die skepping van fasiliteite vir doeleindes van geregistreerde navorsing onvoorwaardelik aan die belastingtoegewing onderworpe behoort te wees. Navorsing self genereer aanvanklik geen inkomste nie en verteenwoordig grootliks net ’n uitgawekomponent. Die doel van die belastingaansporing is dus juis om navorsing meer toeganklik te maak.

Verder is die DA ook van mening dat marknavorsing net soos wetenskaplike navorsing moet kwalifiseer vir belastingverligting. Die DA stem nie saam met die Inkomstediens se argument dat marknavorsing net sekere of spesifieke marksegmente tot voordeel strek nie. Marknavorsing skep nuwe bemarkings- en produksiemoontlikhede vir verdere werkskepping.

Dit is juis marknavorsing wat tot die verbetering van die gehalte van produkte aanleiding gee, beter produkte lewer teen laer pryse, nuwe tegnologie absorbeer en, baie belangrik, die resultate van marknavorsing lei oor die algemeen tot verdere aansporing vir wetenskaplike navorsing, wat wel onderworpe is aan die belastingtoegewings. Die DA sal dus graag wil sien dat marknavorsing ook volgende jaar deur die Minister tot die wetgewing aangesuiwer word.

Die DA steun die wetsontwerp. Dankie. (Translation of Afrikaans paragraphs follows.)

[There is, however, concern about the legislation with regard to tax relief for research and development, as just one of the many amendments to the proposed legislation. Though research activities are risk bound with a high cost element and results are not always guaranteed, we must realise that research makes a big contribution to increase productivity by means of technological advancement.

Research also stimulates economic growth and promotes a skilled worker corps. Research results also imply that scarce resources are mined and used more effectively. The findings of scientific research can also put a country on the agenda of international scientific competitiveness.

In this regard, we can refer to the medical research that led to the first heart transplant in South Africa, Armscor’s weapon research, Pelindaba’s nuclear energy research, the role of the CSIR in technological development and Onderstepoort’s veterinary science services.

However, experts claim that according to technological revolutions the economy and society, after 100 years, functions on only 10% of the previous century’s technological practices, while the other 90% are based on new scientific inventions. Therefore, scientific research is of vital importance.

In order to encourage the private sector to promote research, the DA is of the opinion that the Act should be amended in such a way that all expenditure without guarantees that is incurred for the creation of facilities aimed at registered research should be subjected to unconditional tax concessions.

Research in itself initially generates no income and mainly represents an expenditure component. Therefore the purpose of the tax incentives is, in fact, to make research more accessible.

Furthermore, the DA is also of the opinion that market research should qualify for tax relief, in the same way scientific research does. The DA does not agree with the argument of the Revenue Service that market research only benefits certain or specific market segments. Market research creates new marketing and production possibilities for further job creation.

It is, in fact, market research that leads to the improvement of the quality of products, the delivery of better products at lower prices, and the absorbtion of new technology and, very importantly, the results of market research in general lead to further encouragement of scientific research that is actually subjected to tax concessions. The DA would therefore like to see the Minister ensure that the legislation is amended to include market research next year.

The DA supports the Bill. Thank you.]

Mr Y S BHAMJEE: Chairperson, I take this opportunity to express my deep and warm appreciation for the support and comfort expressed by members of the National Assembly, members of the National Council of Provinces, the hon Minister of Finance, the Commissioner of Sars, the chairperson, colleagues and comrades of the Portfolio Committee on Finance and the general staff of Parliament when my gentle beloved wife, Sabera, was murdered in her surgery on 2 June 2006. My daughters and I were deeply touched by your gestures and will always cherish your solidarity. There is still no closure. Her loss is painful indeed, but life must go on!

So I stand before this House in support of the Revenue Laws Amendment Bill. The essence of this Bill is located in the Minister’s Budget speech delivered to this House in February 2006. The contents dealing with taxation have been divided into two pieces of legislation and tabled for adoption at different intervals.

The aspects of the speech that could be legislated more or less immediately were tabled and adopted by this House during June and July this year as the Taxation Laws Amendment Act. In the main this legislation dealt with personal taxation, the interest income exemption levels, sin taxes and so on.

The themes that required research and consultation are now before the House as the Revenue Laws Amendment Bill. The objective, as the Minister indicated when he tabled the Bill, is to stimulate fiscal measures, “to accelerate economic growth as well as ongoing measures to broaden the tax base so that all our citizens pay their fair share”.

Noting that this is a money Bill, Parliament does not have any power to effect amendments. To secure responses and comments from the affected role- players, the National Treasury and Sars made this draft Bill with its explanatory memorandum available on their website.

Stakeholders submitted their responses to the Bill directly to Sars while others appeared before the Portfolio Committee on Finance, and yet others took the opportunity to appear before both during the draft stages of this Bill. Thus it may be said that the Treasury and Sars consulted with a wide range of responses. This resulted in some changes being effected and they are reflected in the Bill before us.

The Revenue Laws Amendment Bill focuses on offering incentives to ensure compliance with the intention that all taxpayers pay their fair share. This approach has impacted positively on revenue collection and is endorsed even by those whose responses were shelved or rejected.

While the chairperson of the portfolio committee touched on some of their points, I think a repetition in this regard would be good. The following themes were dealt with in the Revenue Laws Amendment Bill: the 2010 Fifa World Cup, the general anti-avoidance rule, reportable arrangements, research and development incentives, oil and gas incentives, recreation clubs, public benefit organisations, taxation of foreign income, personal service entities, taxation on retirement funding, further income tax amendments, estate duty and value added tax.

Owing to time constraints my input will focus on two responses to briefly demonstrate the vigorous nature of the consultation process embarked upon by the Treasury and Sars and by the portfolio committee on the draft proposals of the Revenue Laws Amendment Bill.

Regarding public benefit organisations - PBOs, as they are commonly referred to - religious and nonprofit institutions generally fall under this category. These public benefit organisations in the main motivated that their rate of taxation “should be 29% and not 34% as secondary tax on companies is relevant to companies that distribute profits and declare dividends. Dividends are not declared by PBOs and there should be no reason for comparing for-profit companies to PBOs.”

After deliberations at the portfolio committee hearings it was resolved that, “all PBOs will be subjected to a flat 29% rate in terms of taxable business activities. The 29% rate will apply to a PBO regardless of whether that PBO operates as a company, trust or association. This 29% rate will also apply to taxable club activities.”

The second point I wish to focus on is the general anti-avoidance rule, commonly referred to as GAAR. Simply put, it generally addresses two sorts of taxpayers. Firstly, it aims to empower those who unwittingly fall foul of the law to comply with the correct procedures. Secondly, it attempts to address taxpayers and practitioners who avoid paying the actual tax due, who make use of or exploit certain weaknesses in legislation and procedures.

Business Unity SA, representing a wide range of business interests, provided responses to the provisions of the general anti-avoidance rule. It argued against GAAR and at one level BUSA suggested that “if the tax authority was concerned with the tax avoidance schemes Sars should advocate disclosure requirements, forcing taxpayers to explain the scheme in their return submissions”. BUSA also argued that the anti-avoidance rule is not required as the tax system is working efficiently, pointing to the huge increases in revenue collection.

Business Unity SA’s views were not accepted. The Treasury and Sars responded by stating that the review of section 103 of the Income Tax Act is now repealed and replaced by the general anti-avoidance rule, as announced in the Budget Review in 2005 and the discussion paper distributed on 3 November 2005 with the objective of tabling it in this session.

Having received a number of responses and empowered by international experiences on tax avoidance schemes, the Treasury and Sars endorsed the anti-avoidance rule, concluding: Improvements in revenue collections are driven by economic factors, an enhanced compliance culture and Sars enforcement action.

There is a fundamental responsibility to the taxpayers and practitioners that made this possible to provide a level playing field where everyone is paying their fair share. The proposed GAAR is intended to underpin the progress that has been made and ensure that it is not undermined by a new generation of schemes employed by aggressive taxpayers and practitioners. The estimate revenue loss of R10,7 billion over a period of five years from known transactions in respect of just six types of tax avoidance arrangement, presented to the Portfolio Committee on Finance on 16 March 2006, serves as a warning of the magnitude of the problem confronting us.

It should be noted that the Treasury and Sars has made an important contribution to the success of our bid for the Soccer World Cup by ensuring that the paper work dealing with our commitments on tax exemptions and partial exemptions as per the requirements of Fifa were timeously done. The success of this bid has given us the opportunity to fast-track developmental projects, to witness the construction and upgrading of 10 stadia as well as to improve the surrounding infrastructure, public transport and other social amenities that would make South Africa attractive as a destination for tourists and for potential investors and thereby boost our local economy. We must grasp the nettle.

In conclusion it must be stated that the professional and user-friendly face of Sars is attracting more people daily to be tax compliant and thereby committing them to discharge their obligation to transformation towards improving the general quality of life of all South Africans. The ANC supports the Bill.

The MINISTER OF FINANCE: Thank you very much, Chairperson. In expressing appreciation especially to members of the Portfolio Committee on Finance, let me just assure the hon Bhamjee of our ongoing support, because he has lived through a very difficult period this year. Generally, parties are supporting.

Let me just deal with a few issues that have been raised. The first relates to the general anti-avoidance rule. Of course, it is a very difficult rule and in the course of the discussion between the portfolio committee, Sars and the Treasury, there has been some softening.

But, I think, we need to understand that tax avoidance schemes are, by their very nature, those that move across the globe with great speed. Frequently, they are generated in a large economy like that of the United States, transmitted by the tax advisers, and then find a home across the world. If, then, the approach to law and the measures tends towards the Americanisms, that is partly because of the origin and the management of this.

I want to give the hon Davidson and all members of this House the assurance that there is very close collaboration between, certainly, the Finance Ministry and the Revenue Service – and our counterparts all over the world. Whilst we are not formally members of the OECD, on issues of tax we participate quite actively to ensure that we don’t become a haven for practices that are outlawed elsewhere. It is very important that we recognise that.

In respect of the 2010 issues – and let me, through the House, talk to the Deputy Minister of Finance – we are all excited about 2010, but I think we have to hold a line. This is because Fifa gets big eyes and tries to win things that they haven’t won in other jurisdictions. So we have to hold a tight line. So, Deputy Minister, you and other members of the local organising committee are going to have that role, but it’s a role we understand. It’s just important that we are able to say to all of South Africa that a tight line will be held on these kinds of issues.

The third set of issues I would like to touch on relates to the approach we have taken on incentives in the Revenue Laws Amendment Bill. We try to apply a test as rigorously as possible, because we work from the premise that companies don’t want to part with too much by way of taxation. That’s a fair assumption to make in this environment.

Therefore what we try to look for is that which will have general benefit – hopefully, national benefit - beyond the scope of the company in instances in which an incentive is applied. So when we look at research and development, it’s that that we’d look at. When we look at the issue raised by the hon Van Dyk about market research, it is that that we look at. If you allow one company to deduct its market research so that it makes better soap powder, what do you do to other companies?

So I think that you’re looking for that which would provide a basis for equity in the treatment of the incentive. It’s quite important that we try to do this. It does mean that in the awarding of incentives, the tax administration tends towards more conservatism. I think that there is a very important safeguard in the R&D, and that is a requirement not by the Ministry of Finance but by the Ministry of Science and Technology to report to Parliament annually.

Now, what tends to happen within the complexities of Parliament is that that report may go to the Portfolio Committee on Science and Technology, and the Portfolio Committee on Finance would not be aware of it. Part of what we need to do is to ensure that we can bring all of this together and track it, so that we will be advised by that report on the appropriateness of the incentive going forward. You know, we are sailing in uncharted waters.

But we have to look at those kinds of measures to try to bring it together, so hopefully, Deputy Minister Hanekom, you and Minister Mangena and the department will see this as a service not just to the scientific community but also to the Revenue Service as we go forward.

Let me, in conclusion, just reflect on a curiosity that I have. Whilst these are money Bills, Parliament in the narrow sense of the word does not amend them. I think what members of the portfolio committee would be aware of are all the measures in the way in which it is treated: the placement earlier on the website, the testing of the ideas with the portfolio committee before it’s made public, an opportunity for members of the committee and, through their hearings, outsiders who have an interest in this matter as well to influence the final drafting. There is, in fact, a process whereby the proposals we bring into the parliamentary process are amended along the line.

So there is a curiosity in the treatment thereof. It’s just important that we recognise that we need open channels of communication – direct communication – and the willingness to listen to each other to ensure that we can proceed in the way that we have in which all parties support the Revenue Laws Amendment Bill, 2006. I thank the House for the support. [Applause.]

Debate concluded.

Revenue Laws Amendment Bill read a first time.

Revenue Laws Second Amendment Bill read a second time.

                     REVENUE LAWS AMENDMENT BILL


                       (Second Reading debate)

There was no debate.

Bill read a second time.

The House adjourned at 17:46.

                             __________

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

ANNOUNCEMENTS

National Assembly and National Council of Provinces The Speaker and the Chairperson

1. Bills passed by Houses—to be submitted to President for assent (1) Bill passed by National Council of Provinces on 7 November 2006:

    (a)   Prohibition of Mercenary Activities and Regulation of
        Certain Activities in Country of Armed Conflict Bill [B
        42B—2005] (National Assembly sec—75).
   

National Assembly

The Speaker

1. Referral to Committees of papers tabled

   (1) The following paper is referred to the Standing Committee on Public Accounts and the Portfolio Committee on Trade and Industry for consideration:

    (a)   Report of the Auditor-General on the findings identified
        during an investigation into procurement at the Companies
        and Intellectual Property Registration Office
        (CIPRO)—September 2006 [RP 245-2006].
   

   (2) The following papers are referred to the Portfolio Committee on Defence for consideration and report. The Reports of the Auditor- General are referred to the Standing Committee on Public Accounts for consideration: (a) Report and Financial Statements of the Castle of Good Hope for 2004-2005, including the Report of the Auditor-General on the Financial Statements for 2004-2005 [RP 214-2005].

   (b)    Report and Financial Statements of the Castle of Good Hope
        for 2005-2006, including the Report of the Auditor-General
        on the Financial Statements for 2005-2006 [RP 219-2005].
   

   (3) The following paper is referred to the Standing Committee on Public Accounts and the Portfolio Committee on Defence:

   (a)    Letter from the Minister of Defence, dated 29 September
        2006, to the Speaker of the National Assembly, in terms of
        section 65(2)(a) of the Public Finance Management Act, 1999
        (Act No 1 of 1999), explaining the delay in the tabling of
        the Annual Report of the Castle of Good Hope for 2004-2005.
   

   (4) The following paper is referred to the Portfolio Committee on Public Enterprises for consideration and report. The Report of the Independent Auditors is referred to the Standing Committee on Public Accounts for consideration:

   (a)    Report and Financial Statements of Alexkor Limited for
        2005-2006, including the Report of the Independent Auditors
        on the Financial Statements for 2005-2006.
   

   (5) The following paper must be considered by the House in accordance with the resolution adopted on 21 June 2006 and is referred to the Portfolio Committee on Foreign Affairs for information:

   (a)    Final Report: South African Observer Mission to the 2006
        President and Legislative Elections in the Democratic
        Republic of Congo on 20 June 2006.
   

   (6) The following paper is referred to the Portfolio Committee on Labour and the Portfolio Committee on Provincial and Local Government for consideration and report. The Report of the Auditor-General is referred to the Standing Committee on Public Accounts for consideration:

   (a)    Report and Financial Statements of the Local Government
        Sector Education and Training Authority (LG-Seta) for 2005-
        2006, including the Report of the Auditor-General on the
        Financial Statements for 2005-2006 [RP 79-2006].
   

   (7) The following paper is referred to the Portfolio Committee on Trade and Industry for consideration and report. The Report of the Auditor-General is referred to the Standing Committee on Public Accounts for consideration:

   (a)    Report and Financial Statements of the Small Enterprises
        Development Agency for 2005-2006, including the Report of
        the Auditor-General for the fifteen month period ended on 31
        March2006. (8)   The following paper is referred to the Portfolio Committee on
   Finance for consideration and report. The Report of the Auditor-
   General is referred to the Standing Committee on Public Accounts
   for consideration:
   
   
   (a)    Report and Financial Statements of the Office of the Ombud
        for Financial Services Providers for 2005-2006, including
        the Report of the Auditor-General on the Financial
        Statements for 2005-2006.
   

   (9) The following paper is referred to the Portfolio Committee on Finance and the Portfolio Committee on Public Service and Administration for consideration and report. The Report of the Independent Auditors is referred to the Standing Committee on Public Accounts for consideration:

   (a)    Report and Financial Statements of the Government
        Employees Pension Fund (GEPF) for 2005-2006, including the
        Report of the Independent Auditors on the Financial
        Statements for 2005-2006 [RP 211-2006].
   

   (10) The following paper is referred to the Portfolio Committee on Defence for consideration and report. The Report of the Independent Auditors is referred to the Standing Committee on Public Accounts for consideration:

   (a)    Report and Financial Statements of Denel Proprietary
        Limited for 2005-2006, including the Report of the
        Independent Auditors on the Financial Statements for 2005-
        2006. (11)  The following paper is referred to Standing Committee on the
   Auditor-General for consideration:
   
   
   (a)    Special Report of the Auditor-General on his term of
        office, 1999 to 2006—In support of Democracy [RP 224-2006].
   

   (12) The following paper is referred to the Portfolio Committee on Finance for consideration and report:

   (a)    Consolidated Financial Information for year ended 31 March
        2006 [RP 241-2006], tabled in terms of section 8(1)(a) of
        the Public Finance Management Act, 1999 (Act No 1 of 1999).
   

TABLINGS

National Assembly and National Council of Provinces

1. The Speaker and the Chairperson

   (a) Report of the Auditor-General on the findings identified during a performance audit of official departmental accommodation at the Department of Correctional Services—September 2006 [RP 254-2006].

2. The Minister of Labour (a) Instrument for the Amendment of the Constitution of the International Labour Organisation (ILO), tabled in terms of section 231(2) of the Constitution, 1996.

   (b) Explanatory Memorandum to the Instrument for the Amendment of the Constitution of the International Labour Organisation (ILO).

3. The Minister of Water Affairs and Forestry

   This tabling replaces item 2 under ‘‘Tablings’’ on page 2439 of the Announcements, Tablings and Committee Reports of 2 November 2006: (a) Agreement between the Republic of Botswana, the Republic of Mozambique, the Republic of South Africa and the Republic of Zimbabwe on the Establishment of the Limpopo Watercourse Commission, tabled in terms of section 231(2) of the Constitution, 1996.

   (b) Explanatory Memorandum on the Agreement between the Republic of Botswana, the Republic of Mozambique, the Republic of South Africa and the Republic of Zimbabwe on the Establishment of the Limpopo Watercourse Commission.

COMMITTEE REPORTS

National Assembly

1. Report of the Portfolio Committee on Minerals and Energy on the Electricity Regulation Amendment Bill [B 20 – 2006] (National Assembly – sec 76), dated 8 November 2006: The Portfolio Committee on Minerals and Energy, having considered the subject of the Electricity Regulation Amendment Bill [B 20 – 2006] (National Assembly –sec 76), referred to it, and classified by the Joint Tagging Mechanism as a section 76 Bill, reports the Bill with amendments [B 20A – 2006].

2. One-Hundred-and-Eleventh Report of Standing Committee on Public Accounts on Independent Development Trust, dated 25 October 2006:

 1.     INTRODUCTION
     The Standing Committee on Public Accounts, having considered the
     Annual Report and the Report of the Auditor-General on the
     Financial Statements of the Independent Development Trust for the
     year ended 31 March 2006 tabled in Parliament and referred to it,
     reports as follows:


 2.     AUDIT OPINION
     The Committee noted the unqualified audit opinion expressed by the
     Auditor-General, and trusts that future audit opinions will be
     equally unqualified.


 3.     CONCLUSION
    The Committee is of the view that no further interaction with the
    Independent Development Trust is necessary for the financial year
    under review given the information so far.
    The Committee therefore awaits the next Annual Report and the
    Report of the Auditor General.

Report to be considered.

1. One-Hundred-and-Twelfth Report of Standing Committee on Public Accounts on Insurance Seta, dated 25 October 2006:

 1.     INTRODUCTION
    The Standing Committee on Public Accounts, having considered the
    Annual Report and the Report of the Auditor-General on the
    Financial Statements of the Insurance SETA for the year ended 31
    March 2006, tabled in Parliament and referred to it, reports as
    follows:


 2.     AUDIT OPINION
    The Committee noted the unqualified audit opinion expressed by the
    Auditor-General, and trusts that future audit opinions will be
    equally unqualified.


 3.     CONCLUSION
    The Committee is of the view that no further interaction with the
    Accounting Authority of the Insurance SETA is necessary for the
    financial year under review given the information so far.


    The Committee therefore awaits the next Annual Report and the
    Report of the Auditor General.

Report to be considered.

1. One-Hundred-and-Thirteenth Report of Standing Committee on Public Accounts on International Trade Administration Commission of South Africa (ITAC), dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Auditor-General on the Financial Statements of the ITAC for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Auditor-General, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that no further interaction with the ITAC would be necessary for the financial year under review. The Committee therefore awaits the next Annual Report and the Report of the Auditor-General.

Report to be considered.

1. One-Hundred-and-Fourteenth Report of Standing Committee on Public Accounts on Khula Enterprise Finance Limited, dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Independent Auditors on the Financial Statements of Khula Enterprise Finance Limited (Khula) for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by Independent Auditors, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that no further interaction with Khula Enterprises is necessary for the financial year under review given the information so far. The Committee therefore awaits the next Annual Report and the Report of the Independent Auditors.

Report to be considered.

1. One-Hundred-and-Fifteenth Report of Standing Committee on Public Accounts on Mining Qualification Authority (MQA), dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Auditor-General on the Financial Statements of the Mining Qualification Authority for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Auditor-General, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that no further interaction with the Accounting Authority of the Mining Qualification Authority is necessary for the financial year under review given the information so far.

   The Committee therefore awaits the next Annual Report and the Report of the Auditor General.

Report to be considered.

1. One-Hundred-and-Sixteenth Report of Standing Committee on Public Accounts on National Empowerment Fund, dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Independent Auditors on the Financial Statements of the National Empowerment Fund for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Independent Auditors, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that no further interaction with the National Empowerment Fund is necessary for the financial year under review. The Committee therefore awaits the next Annual Report and the Report of the Independent Auditors.

Report to be considered.

1. One-Hundred-and-Seventeenth Report of Standing Committee on Public Accounts on National Nuclear Regulator, dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Auditor-General on the Financial Statements of the National Nuclear Regulator for the year ended 31 March 2006 tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Auditor-General, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that no further interaction with the Accounting Authority of the National Nuclear Regulator is necessary for the financial year under review given the information so far.

   The Committee therefore awaits the next Annual Report and the Report of the Auditor General.

Report to be considered.

1. One-Hundred-and-Eighteenth Report of Standing Committee on Public Accounts on Primary Agriculture, Education & TrainingAuthority (PAETA), dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Auditor-General on the Financial Statements of the Primary Agriculture Education and Training Authority (PAETA) for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Auditor-General, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that no further interaction with the Accounting Authority of PAETA is necessary for the financial year under review given the information so far.

   The Committee therefore awaits the next Annual Report and the Report of the Auditor General. Report to be considered.

5. One-Hundred-and-Nineteenth Report of Standing Committee on Public Accounts on South African Quality Institute, dated 25 October 2006:

6. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Auditor-General on the Financial Statements of the South African Quality Institute for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

7. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Auditor-General, and trusts that future audit opinions will be equally unqualified.

8. CONCLUSION The Committee is of the view that no further interaction with the South African Quality Institute is necessary for the financial year under review given the information so far. The Committee therefore awaits the next Annual Report and the Report of the Auditor General.

Report to be considered.

1. One-Hundred-and-Twentieth Report of Standing Committee on Public Accounts on South African National Accreditation System (SANAS),dated 25October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Independent Auditors on the Financial Statements of the South African National Accreditation System (SANAS) for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Independent Auditors, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that no further interaction with the SANAS is necessary for the financial year under review given the information so far.

   The Committee therefore awaits the next Annual Report and the Report of the Independent Auditors.

Report to be considered.

1. One-Hundred-and-Twenty-First Report of Standing Committee on Public Accounts on South African Reserve Bank (SARB), dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Auditor General on the Financial Statements of the South African Reserve Bank (SARB) for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Auditor General, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that no further interaction with the South African Reserve Bank (SARB) is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Auditor General. Report to be considered.

5. One-Hundred-and-Twenty-Second Report of Standing Committee on Public Accounts on South African Special Risk Insurers Association (SASRIA) Limited, dated 25 October 2006:

6. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Independent Auditors on the Financial Statements of SASRIA Limited for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

7. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Independent Auditors, and trusts that future audit opinions will be equally unqualified.

8. CONCLUSION The Committee is of the view that no further interaction with the Accounting Authority of SASRIA Limited is necessary for the financial year under review given the information so far.

   The Committee therefore awaits the next Annual Report and the Report of the Independent Auditors. Report to be considered.

9. One-Hundred-and-Twenty-Third Report of Standing Committee on Public Accounts on Safety and Security (SASSETA), dated 25 October 2006:

10. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Auditor-General on the Financial Statements of the SASSETA for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

11. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Auditor-General, and trusts that future audit opinions will be equally unqualified.

12. CONCLUSION The Committee is of the view that no further interaction with the Accounting Authority of the SASSETA is necessary for the financial year under review given the information so far.

    The Committee therefore awaits the next Annual Report and the Report of the Auditor General. Report to be considered.

13. One-Hundred-and-Twenty-Fourth Report of Standing Committee on Public Accounts on Service Sector Education & Training Authority (Service SETA), dated 25 October 2006:

14. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Auditor-General on the Financial Statements of the Service SETA for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

15. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Auditor-General, and trusts that future audit opinions will be equally unqualified.

16. CONCLUSION The Committee is of the view that no further interaction with the Accounting Authority of the Service SETA is necessary for the financial year under review given the information so far. The Committee therefore awaits the next Annual Report and the Report of the Auditor General.

Report to be considered.

1. One-Hundred-and-Twenty-Fifth Report of Standing Committee on Public Accounts on Air Traffic and Navigation Services, dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual report and the Report of the Independent Auditors on the Financial Statements of the Air Traffic and Navigation Services for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Independent Auditors, and trusts that future audit opinions shall be equally unqualified.

4. CONCLUSION The Committee is of the view that no further interaction with the Air Traffic and Navigation Services is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Independent Auditors.

Report to be considered.

1. One-Hundred-and-Twenty-Sixth Report of Standing Committee on Public Accounts on ARTSCAPE, dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Auditor-General on the Financial Statements of the Artscape for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Auditor-General, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that given the information thus far, no further interaction with the Accounting Authority of the Artscape is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Auditor General.

Report to be considered.

1. One-Hundred-and-Twenty-Seventh Report of Standing Committee on Public Accounts on Blind South Africa, dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Auditor-General on the Financial Statements of Blind South Africa for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Auditor-General, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that given the information thus far, no further interaction with the Accounting Authority of Blind South Africa is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Auditor General.

Report to be considered.

1. One-Hundred-and-Twenty-Eighth Report of Standing Committee on Public Accounts on Business and Arts South Africa, dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Independent Auditors on the Financial Statements of the Business and Arts South Africa for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the IndependentAuditors, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that given the information thus far, no further interaction with the Accounting Authority of the Business and Arts South Africa is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Independent Auditors.

Report to be considered.

1. One-Hundred-and-Twenty-Ninth Report of Standing Committee on Public Accounts on Council for Higher Education, dated 25 October2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Auditor-General on the Financial Statements of the Council for Higher Education for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Auditor-General, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that given the information thus far, no further interaction with the Accounting Authority of the Council for Higher Education is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Auditor General.

Report to be considered.

1. One-Hundred-and-Thirtieth Report of Standing Committee on Public Accounts on Education Labour Relations Council, dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Auditor-General on the Financial Statements of the Education Labour Relations Council for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Auditor-General, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that given the information thus far, no further interaction with the Accounting Authority of the Education Labour Relations Council is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Auditor General.

Report to be considered.

1. One-Hundred-and-Thirty-First Report of Standing Committee on Public Accounts on International Marketing Council (IMC), dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Auditor-General on the Financial Statements of the International Marketing Council for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Auditor-General, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that given the information thus far, no further interaction with the Accounting Authority of the International Marketing Council is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Auditor General.

Report to be considered.

1. One-Hundred-and-Thirty-Second Report of Standing Committee on Public Accounts on National Housing Finance Corporation Ltd, dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Auditor-General on the Financial Statements of the National Housing Finance Corporation for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Independent Auditors, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that given the information thus far, no further interaction with the Accounting Authority of the National Housing FinanceCorporation is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Independent Auditors.

Report to be considered.

1. One-Hundred-and-Thirty-Third Report of Standing Committee on Public Accounts on National Museum Bloemfontein, dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Independent Auditors on the Financial Statements of the National Museum Bloemfontein for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Independent Auditors, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that given the information thus far, no further interaction with the Accounting Authority of the National Museum Bloemfontein is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Independent Auditors.

Report to be considered.

1. One-Hundred-and-Thirty-Fourth Report of Standing Committee on Public Accounts on NURCHA Financing Construction, dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Independent Auditors on the Financial Statements of the NURCHA Financing Construction for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Independent Auditors, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that given the information thus far, no further interaction with the Accounting Authority of the NURCHA Financing Construction is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Independent Auditors.

Report to be considered.

1. One-Hundred-and-Thirty-Fifth Report of Standing Committee on Public Accounts on SERVCON Housing Solutions, dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Independent Auditors on the Financial Statements of the SEVCON Housing Solutions for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Independent Auditors, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that given the information thus far, no further interaction with the Accounting Authority of the SEVCON Housing Solutions is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Independent Auditors.

   Report to be considered.

5. One-Hundred-and-Thirty-Sixth Report of Standing Committee on Public Accounts on the Market Theatre, dated 25 October 2006:

6. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Auditor-General on the Financial Statements of the Market Theatre for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

7. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Auditor-General, and trusts that future audit opinions will be equally unqualified.

8. CONCLUSION The Committee is of the view that given the information thus far, no further interaction with the Accounting Authority of the Market Theatre is necessary for the financial year under review. The Committee therefore awaits the next Annual Report and the Report of the Auditor General.

Report to be considered.

1. One-Hundred-and-Thirty-Seventh Report of Standing Committee on Public Accounts on the Presidency, dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Auditor-General on the Financial Statements of the Presidency for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Auditor-General, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that given the information thus far, no further interaction with the Accounting Authority of the Presidency is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Auditor General.

Report to be considered.

1. One-Hundred-and-Thirty-Eighth Report of Standing Committee on Public Accounts on the Thubelisha Homes, dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Independent Auditors on the Financial Statements of the Thubelisha Homes for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Independent Auditors, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that given the information thus far, no further interaction with the Accounting Authority of the Thubelisha Homes is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Independent Auditors.

Report to be considered.

1. One-Hundred-and-Thirty-Ninth Report of Standing Committee on Public Accounts on Trans-Caledon Tunnel Authority, dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Independent Auditors on the Financial Statements of the Trans-Caledon Tunnel Authority for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Independent Auditors, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that given the information thus far, no further interaction with the Accounting Authority of the Trans- Caledon Tunnel Authority is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Independent Auditors. Report to be considered.

5. One-Hundred-and-Fortieth Report of Standing Committee on Public Accounts on Voortrekker Museum, dated 25 October 2006:

6. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Auditor-General on the Financial Statements of the Voortrekker Museum for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

7. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Auditor-General, and trusts that future audit opinions will be equally unqualified.

8. CONCLUSION The Committee is of the view that given the information thus far, no further interaction with the Accounting Authority of the Voortrekker Museum is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Auditor General.

Report to be considered.

1. One-Hundred-and-Forty-First Report of Standing Committee on Public Accounts on War Museums of the Boer Republic, dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Independent Auditors on the Financial Statements of the War Museums of the Boer Republic for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Independent Auditors, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that given the information thus far, no further interaction with the Accounting Authority of the War Museums of the Boer Republic is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Independent Auditors.

Report to be considered.

1. One-Hundred-and-Forty-Second Report of Standing Committee on Public Accounts on the Water Research Commission, dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Auditor-General on the Financial Statements of the Water Research Commission for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Auditor-General, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that given the information thus far, no further interaction with the Accounting Authority of the Water Research Commission is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Auditor General.

Report to be considered.

1. One-Hundred-and-Forty-Third Report of Standing Committee on Public Accounts on Umalusi Council for Quality Assurance, dated 25 October 2006:

2. INTRODUCTION The Standing Committee on Public Accounts, having considered the Annual Report and the Report of the Independent Auditors on the Financial Statements of the uMalusi Council for Quality Assurance for the year ended 31 March 2006, tabled in Parliament and referred to it, reports as follows:

3. AUDIT OPINION The Committee noted the unqualified audit opinion expressed by the Independent Auditors, and trusts that future audit opinions will be equally unqualified.

4. CONCLUSION The Committee is of the view that given the information thus far, no further interaction with the Accounting Authority of the uMalusi Council for Quality Assurance is necessary for the financial year under review.

   The Committee therefore awaits the next Annual Report and the Report of the Independent Auditors.

Report to be considered.