National Assembly - 27 October 2009
TUESDAY, 27 OCTOBER 2009 __
PROCEEDINGS OF THE NATIONAL ASSEMBLY
____
The House met at 14.00.
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.
MEDIUM-TERM BUDGET POLICY STATEMENT
ADJUSTMENTS APPROPRIATION BILL
(Introduction)
The MINISTER OF FINANCE: Hon Speaker, Mr President, Mr Deputy President, fellow Cabinet colleagues and Deputy Ministers, the Governor of the Reserve Bank who regrettably cannot be with us today, the Governor-Designate Gill Marcus, the MECs for Finance, members of the diplomatic corps, directors- general, the heads of the finance family, guests, hon members, ladies and gentlemen, it is my privilege today to present to this House and fellow South Africans the first Budget Policy Statement of President Zuma’s government. This is indeed a difficult time for most of the world and for South Africa. But is also a time of opportunity, a time to face down adversity and proclaim that we will overcome its challenges. We will adapt to the new circumstances. We will not hesitate to do things differently and to act boldly. That is our essential message.
A recession, triggered by unconstrained greed and poor financial regulation, has wreaked havoc across the world. No country has been spared. It has swept across South Africa as well. It has left economic devastation and human tragedy in its wake. While the rich have become less rich, the poor, working people and smaller businesses have been seriously damaged.
In South Africa, 500 000 people have lost their jobs. The Unemployment Insurance Fund, under Minister Mdladlana’s trusteeship, has seen monthly claims double since April last year. Businesses have come under strain. The banking sector, understandably, became risk-averse and clamped down on credit – perhaps a little too much.
Economic distress is not a statistical trajectory, but a very human, very real, often painful, series of shocks. Men and women have lost their jobs. Households cannot pay the rent or food bills. Companies face the threat of liquidation.
There are now signs that economic recovery is under way, nonetheless. So there is some glimmer of hope. The leading business cycle indicator has improved by 6,8 percentage points since its low point in March this year and there is renewed buoyancy in the markets. But we also recognise that vulnerability and poverty are deep-rooted in our society, and these structural challenges require sustained, broad-based transformation of our economy, beyond the present recovery.
South Africans from all walks of life know what it means to be both resilient and sensible in the face of adversity. We are a remarkable people. We will succeed in our long walk to a better life for all our people.
This Medium-Term Budget Policy Statement, MTBPS, presents the fiscal framework within which the Cabinet will work to deliver on the five priorities of this government. They are familiar to us all, and they are: creating jobs; enhancing the quality of education; improving health outcomes; emphasising rural development; and fighting crime and corruption.
The MTBPS updates the revenue, spending and borrowing projections for the current fiscal year. It reflects the collective understanding of Cabinet on the economic and budgetary challenges that lie ahead.
The MTBPS has a special place in the parliamentary programme because it enables legislators and the public, business and civil society leaders, workers and citizens, to consider government’s budget plans several months ahead of the Budget itself, in February next year.
In this policy statement we have five clear assurances for all South Africans. Firstly, we will sustain our delivery of services and developmental programmes; secondly, we will carefully prioritise and focus our efforts; thirdly, we will be diligent in the management of public finances and not burden future generations; fourthly, we will vigorously pursue savings within all spheres of government; and, lastly, we will ensure consistency in policy, while creating room for engagement and review.
These are commitments that flow from the values embedded in our Constitution. But for us to succeed, we need a shared compact across all the divides in this House, and indeed across the nation. We need to agree emphatically that we will not tolerate corruption. I hope you agree. [Applause.]
We will act forcefully against wastage. We will insist on value for money for the billions that we spend. As I said in a press conference earlier, we don’t want pickpocketing from the public fiscus. We will clean up the procurement system and take strong action against those who feed selfishly off the state.
Inkohlakalo ngeke siyibekezelele! [Ihlombe.] [We won’t tolerate corruption! [Applause.]]
Empowered by these values, even under circumstances of adversity, strong leadership leads to extraordinary results. Not everything is gloomy, and we need to emphasise that. We can celebrate the remarkable acts that ordinary people perform miraculously everywhere in our society: where there are effective schools even in poor rural villages; where - and Minister Ndebele will be pleased I’m mentioning transport - there have been major advances in transport infrastructure; and where there are community initiatives that are contributing to food security and local job creation.
Broad-based economic and social development is about commitment, it’s about hard work, and it’s about initiatives in government and in the private sector and civil society as well. It is about shared values and how we work together, whether in business, government or voluntary organisations, whether you are a manager, a worker, or an adviser.
The question that we are all confronted with is: Can we do this? Can we work together to meet the five shared, national, social and developmental goals? To borrow a phrase: Yes, we can!
Next year, as we invite the world to join us in a great festival of football – and this is our proof - we will demonstrate that we can take on a giant project, work to a plan, complete major construction projects, reconfigure city transport systems, and energise a uniquely South African diversity of hospitality arrangements. Some of the budgets went slightly overboard, but that is alright.
Of course there were sceptics. There were those who said we couldn’t do it, who talked about the lights going out, who spread dark rumours of a plan B somewhere else in the southern hemisphere, but those voices are now silent. Our preparation for the 2010 World Cup began with a vision and a statement of intent. Today we see the reality on the ground. [Applause.]
The MTBPS is our budgetary and fiscal declaration of intent. It begins with a review of the South African economy and the outlook for the period ahead.
For the first time since 1994, we are indeed in a recession. The volume of production in the South African economy has declined by 2% in the first half of this year. This followed an implosion of several major American and international financial institutions last year and a sharp deterioration in global trade and commodity prices. Production and earnings of our economy closely follow global trends, so a decline in South African industry and exports was unavoidable. Decoupling – as some people thought might happen – did not happen.
Internationally, a co-ordinated response to the crisis and collective efforts to reform the global financial system have been initiated by leaders of the G20 economies, of which South Africa is an active member. Huge injections of finance by governments and central banks have assisted in restoring credit flows and rebuilding investor confidence - and only just. However, there is still considerable uncertainty about the pace and sustainability of the global economic recovery.
The recession requires us to make substantial changes to our fiscal projections and plans. It means that we have to achieve more with less. We cannot spend money on wasteful extravagances and golf days. Fortunately, Minister Manuel does not play golf any more!
We cannot tolerate unnecessary bureaucratic structures, and we must achieve greater value for money in contracting for goods and services. Under President Zuma’s leadership the entire Cabinet is united in this commitment to strengthen and accelerate the pace of transformation of our economy, even in the face of current economic setbacks.
The present crisis demands of us to extend our investment in job creation, and to embed it fully in our rural development strategy, social services and local infrastructure programmes. The crisis calls for a new blend of skills development and a renewal of schools and colleges. As Nkosi Albert Luthuli often emphasised, there is nothing more important than education in building national consciousness and pride, and in meeting the needs of the people and our economy.
The crisis challenges us to reconstruct a new deal for our young people, people who today have little hope; new opportunities for school-leavers, a new partnership between workseekers and employers, and responsible leadership in the public service.
Restoring growth and improving financial regulation are immediate challenges. In addition, Cabinet will ask questions about our longer-term development path under President Zuma’s guidance.
What kinds of investment will contribute to more rapid poverty reduction, and to a more balanced distribution of income and opportunity? How should we adapt to changing global trade opportunities, the realignment of East- West and North-South relations, and the extraordinary dynamics of product innovation and technology change? How should we reform our economic regulatory framework in banking, social security, financial services, health care, agriculture and food security? How do we address future energy, water and transport needs? How do we reduce our carbon emissions? How do we share the cost burden of these and other investments?
These are all questions that all of us in this House should address. They are not party-political questions.
In exploring these questions, we should expect to find that some parts of our present policy framework are sound and should be reinforced. Others need to be dismantled and overhauled. We need to pursue options through a dialogue that respects a diversity of views and a plurality of methodologies. We need the humility to be open to different paradigms. It’s a different age and a different time we are living in today.
This is our approach to our own South African challenges and, yes, we must seek, and demand, greater courage and greater humility also in the international quest for a just and more stable future. We have just seen what the effects of an uneven and unbalanced world are.
I believe that George Soros is right when he warns, for example, that the profits and bonuses earned by Wall Street banks are “hidden gifts” from the state. In other words, they wouldn’t be able to give the bonuses if they didn’t have the bailouts. These hidden gifts are thus a consequence of unchecked greed and inadequate regulation.
Some of you might have read that one particular bank is going to pay bonuses to about 14 000 people, and has set aside some $15 billion to $16 billion to pay those bonuses. That is the scale of incentives that we are talking about that creates this crisis.
But the global crisis is not just about credit derivatives and bankers’ pay packages – although these are important. There are much deeper structural imbalances in trade, in access to knowledge and resources, in the distribution of wealth and consumption.
We are progressively tackling South Africa’s legacy of inequality, social exclusion and economic disadvantage. The global community must also address the need for a different, more inclusive and more just economic model. The unevenness that we see in the world today is unacceptable.
This year’s Medium-Term Budget Policy Statement, given our circumstances, is not so much about how much more we propose to do or spend; it is about what needs to be done differently.
There are both new initiatives and established programmes on which to build. In the Presidency we have a fresh approach to planning, and a new urgency in measuring progress in service delivery, under the guidance of Ministers Manuel and Chabane.
This year already several steps are under way. Minister Doidge has been tireless in campaigning for greater participation of municipalities and government agencies in the Expanded Public Works Programme.
Ministers Baloyi and Shiceka have clearly signalled that failures in public service management will not be tolerated, whether at national, provincial or local level. [Applause.]
Building strong government institutions and the evolution of a dynamic economy are complex, uneven processes and the required turnaround in the public service will take hard work. But we know that, motivated by a clear sense of purpose, real and visible progress can be made. Better lives for our children will be built on the foundations we lay this year and the next, and over the term of this administration.
In framing proposals for next year’s budget, we have been able to draw on the framework for South Africa’s response to the economic crisis, developed earlier this year under the guidance of the then President, now Deputy President, Motlanthe, and facilitated by the National Economic Development and Labour Council, Nedlac.
Several aspects are discussed in more detail in the MTBPS. I will mention a few: a counter-cyclical fiscal and monetary policy stance; continued public infrastructure investment and support for investments in industrial capacity and competitiveness; reskilling of workers; support for industries in distress or undergoing restructuring; and encouragement of innovation, including a focus on climate change challenges.
Implementation of these initiatives, co-ordinated by Minister Patel, will gain impetus as part of a deeper and sustained economic development strategy.
Before turning to proposals for the 2010 Budget, allow me to outline the changes to the 2009-10 framework and appropriations. In other words, what are we doing differently from the Budget announced in February this year?
Consolidated budget revenue is now expected to be R658 billion in 2009-10, which is considerably lower than the February estimate. What are some of the causes of this?
Income tax paid by companies will be R21 billion less than anticipated in February because of lower earnings by companies. VAT receipts will be R31 billion lower because of reduced consumption. Customs and excise duties will be R9 billion lower owing to the decline in imports.
The fall in customs revenue will negatively affect the SA Customs Union members, which highlights the urgency of completing the proposed review and revision of the Sacu revenue-sharing formula. In total, tax revenue is expected to be some R70 billion less than the February Budget projection.
Consolidated government expenditure, on the other hand, will rise from R715 billion last year to an estimated R841 billion this year, or some 35% of gross domestic product. In comparison with last year, expenditure is projected to increase by R127 billion, while revenue declines by R34 billion. The net result is a widening borrowing requirement: the consolidated budget deficit will amount to R184 billion in 2009-10, or 7,6% of GDP.
Taken together with the financing requirements of Eskom, other state-owned enterprises and municipalities, the overall public sector borrowing requirement this fiscal year will amount to R285 billion. Last year, by comparison, the public sector borrowing requirement was only R89 billion. But we are safe; don’t worry about the borrowing, because it is under control.
Budget deficits have increased in many countries across the world, but our fiscal response to the economic downturn is one of the largest. Whereas in other parts of the world spending is being cut and projects cancelled, we in South Africa are able to continue our investment plans, because we entered the economic downturn with a budget surplus and a healthy fiscal position. [Applause.]
Additionally, whereas the response in other countries has been dominated by financial transfers to banks and other businesses, our spending growth is strongly driven by real physical investment: road and rail construction, new power stations, housing, water and sanitation systems.
We are now accustomed to seeing Ministers Ndebele, Peters, Hogan and Sonjica in hard hats and with concrete dust on their shoulders as they go through construction sites. Even Minister Stofile, I am told, has become an expert on arches and engineering load factors. You will see that he is a happy and relieved man, because we will have 10 magnificent football stadiums ready to welcome the world to the Fifa World Cup next year. [Applause.] They are applauding because you are happy, Minister Stofile.
As in the past, there are various changes to the appropriations for the current year that I wish to table for Parliament’s consideration. These are set out in the Adjustments Appropriation Bill, and the revised appropriations by Vote are explained in the Adjusted Estimates of National Expenditure, which I will table later.
We are in the midst of a realignment of responsibilities that involves several departments and Votes. In some cases, function shifts have already been effected, and the funds transferred between Votes in the Adjustments Appropriation. In other cases, new departments will take responsibility for their budgets from next April.
The adjustments include some R562 million in additional expenditure associated with the new national government structure and functions, including R250 million for Minister Nkwinti. I should have said Minister Nkwinti’s rural development responsibilities; he was getting happy there! [Laughter.]
In total, the adjusted expenditure level for this year is R14 billion more than the February Budget estimate. I will not detail all the changes, but let me share some of the main changes with the House. The rollovers of unspent moneys from last year amount to R1,5 billion, mainly for infrastructure and building projects. These are acceptable rollovers, if you like.
A total of R16,4 billion in unforeseeable and unavoidable expenditure and adjustments has been recommended by the Treasury Committee this year, of which R12 billion will pay for the higher-than-budgeted salary adjustments.
Allocations are also made to assist municipalities to meet emergency water supply requirements, to respond to several cholera outbreaks, and to assist farmers affected by drought in the Eastern Cape, flooding in the Western Cape, locust outbreaks in Limpopo and foot-and-mouth disease in Mpumalanga. [Applause.] Municipalities will receive R509 million more to meet the increased cost of electricity supply to poor households. [Applause.]
Two hundred million rand will go to the SABC to meet short-term liquidity requirements. [Interjections.] You had better applaud, otherwise this broadcast won’t go through! [Applause.] [Laughter.]
Nine hundred million rand goes to the Department of Health to take account of the increased uptake of HIV and Aids treatment programmes. [Applause.]
An amount of R1 billion for recapitalisation goes to the Land Bank which has made good progress in turning around its financial position. [Interjections.] [Applause.]
A saving of R1,5 billion has been declared on the Defence Vote, associated with delays and foreign exchange cost adjustments in defence procurement programmes. Let me take this opportunity to congratulate the Minister of Defence and Military Veterans, Minister Sisulu, on her completion of support for the Burundi peace process, for which a final allocation is made. We must congratulate the Defence Force. [Applause.]
I turn now to our projections for the three-year period ahead, in preparation for the 2010 Budget. Against the background of the global economic decline, the outlook for the South African economy is significantly weaker than projected in February, as I indicated earlier.
Real GDP is expected to be 1,9% lower this year – that’s negative - than in 2008, and growth of 1,5% is projected for 2010, rising to 2,7% in 2011 and 3,2% in 2012. Some say that we are being slightly conservative in this regard, but let the economy ultimately decide. Exports and imports have both declined by about 20% in volume terms this year, reflecting the sharp downturn in world trade. We expect a recovery in trade of about 4% next year, accelerating moderately in subsequent years.
Gross fixed capital formation is expected to average 6% growth over the period ahead, supported by continued public sector infrastructure spending and a recovery in private investment. There is considerable uncertainty in these numbers, you will understand. A faster global recovery could improve prospects for next year, but South Africa’s recovery lags behind global trends to some extent, mainly because households – that is, families in South Africa – carry a substantial overhang of debt. In other words, we have borrowed too much money, which holds back more robust consumption expenditure. Because we have borrowed, we have to pay back our loans and aren’t able to spend currently. This is not a bad thing, actually.
Partly because of large imported equipment requirements of our transport and power-generation investment projects, South Africa imports considerably more than we export. Payments to non-resident investors have also remained high.
The deficit on the current account of the balance of payments will be about 5% of GDP this year, rising somewhat over the medium term. We therefore rely on capital inflows from abroad, which have continued to exceed the current account shortfall.
The exchange rate has strengthened in recent months as a result of these inflows. This is a cause for concern, as it impacts negatively on South African business.
The Treasury will support the ongoing accumulation of foreign exchange reserves by the Reserve Bank, which assists in moderating the appreciation of the rand. Official reserves have now reached US$40 billion, equivalent to over 12% of GDP. We should congratulate the Reserve Bank on their achievement. [Applause.]
For the past two years, consumer price inflation has exceeded the target range of 3% to 6%. We expect CPI inflation to average 6,3% next year and 6% in 2011. Members of this House will be aware that the moderation in consumer price inflation over the past year has enabled the Reserve Bank to lower interest rates by 5 percentage points. Our inflation targeting framework is an important element in macroeconomic co-ordination. It has assisted in lowering inflation expectations, and in preventing inflation from undermining our competitiveness.
Monetary policy has to take account of the lag of some 18 to 24 months between interest rate changes and their effect on demand, and on a range of external influences on inflation that cannot be directly controlled.
We recognise that alongside inflation reduction and financial stability, we must seek faster development and employment creation. I welcome public debate on this issue, and have agreed with the Governor of the Reserve Bank and the Governor-Designate, Ms Marcus, that monetary policy should also support our aim of balanced and sustainable growth.
Governor Mboweni has steered the Reserve Bank’s supervision of our monetary system with great wisdom. Members of the House will join me, I know, in thanking him for a decade of sound monetary leadership. [Applause.] We look forward to a constructive partnership with his successor, Ms Gill Marcus.
The economic crisis has exposed risks embedded in the global financial system and the failure of regulators to work together in supervising multinational financial institutions. Under the guidance of the Financial Stability Board and the G20, various countries are now implementing macroprudential approaches to financial regulation, reviewing capital adequacy requirements of banks and adopting more stringent standards of disclosure and governance.
South Africa’s financial system proved to be highly resilient during the global financial crisis, partly because of the phasing in of prudential regulation of foreign exposure over previous years. This approach is in line with best international practice, and the government is in a position to announce further reforms to lower the cost of doing business, while managing risks in a volatile international environment.
Proposed changes include, firstly, increases in the rand thresholds applicable to outward investments by South African companies; secondly, removal of various restrictions on rand conversion of export proceeds and advance payments for imports; and, thirdly, increases in foreign capital allowances for resident individuals. Details will be released by the Reserve Bank.
In support of regional economic integration, we are further relaxing the approvals required for investing in the Southern African Development Community countries. The current exchange control regulatory framework for approving inward investment in South Africa is also in need of review. I intend to table proposals for modernisation of this system early next year, after appropriate consultations.
These are reforms that will contribute to South Africa’s attractiveness as an investment destination, and to South Africa’s role as a financial centre in Africa. But members of the House will appreciate that it is not enough to modernise our financial system - there are several other aspects of our new growth and employment path that we wish to table for consideration under President Zuma’s guidance.
Economic development is in part about financial and sectoral co-ordination. Working together with Ministers Nkwinti, Shabangu, Nyanda, Van Schalkwyk, Davies, Pandor, Patel and other members of the economic cluster, we have to explore options for promoting the development of our mining industry, lowering costs in telecommunications and transport, expanding tourism, enhancing technology, and developing further trade opportunities, drawing, where appropriate, on international experience.
In order to generate some discussion, the recent report by the Commission on Growth and Development, chaired by Professor Michael Spence, offered the following summary of some of the strategies that were followed by 13 countries that succeeded in expanding national output and incomes by over 7% per year for at least 25 years. In other words, what did these countries do to achieve the growth that they actually achieved?
The following are some of the factors that we need to take into account in our debate. They fully exploited the world economy. They imported what the rest of the world knew, and exported what it wanted. They maintained macroeconomic stability by focusing on keeping inflation low and budget deficits moderate. They mustered high rates of saving and investment to finance economic growth. They let markets allocate resources, including during economic downturns, and provided appropriate training and skills development to enable people to move from declining to rising sectors. We might have to rethink some of that after this crisis. They had committed, credible and capable governments that held public agencies accountable and sought to achieve long-term targets that were publicly articulated.
Minister Chabane’s work in the Presidency on development targets and improving accountability across government is clearly central to an effective growth strategy, and complements our approach to budgeting for improved service delivery.
We know that our growth path has to include enhancement of the labour- absorbing capacity of our economy, for employment brings the best prospects for permanent reductions in poverty. Young people need to enter a labour market that can provide jobs and skills development. Workers need to be able to advance in the workplace or move between firms, based on relevant skills and growing demand across all sectors.
To succeed in global markets requires that South African firms achieve new levels of productivity on a continual basis. This quest has to be supported by effective public policies and public institutions.
The world is a very unequal and structurally imbalanced place. Yet, there is reason for hope in the severity of the shock waves that have reverberated through the global systems over the past year.
This is not the arrival of a new, more just, world. But if you are realistic, it is perhaps the beginning of a new global dialogue and indeed contestation about growth and development, to which we as South Africans from all walks of life can contribute, in the G-20, the United Nations, the World Bank, at the Copenhagen climate summit, amongst many other forums.
I know that Minister Nkoana-Mashabane will agree with me when I say that what we achieve at home speaks loudest in our international diplomacy.
We must prepare to do extraordinary things. The ordinary will not deliver the jobs that are sought by young school-leavers, shelter for those who are homeless, training for those who need skills, new opportunities for businesses in difficulty, or an environmentally responsible development path. In other words, if we continue as we are, if we do nothing differently, if we do not challenge ourselves to do things differently and indeed think differently, we will not get different results. [Applause.]
Let me outline, in brief, the framework proposed for the 2010 Budget, that’s due in February next year. We begin with the revenue at our disposal. I have already indicated that tax revenue is sharply lower than expected this year. Our projection is that as economic growth picks up, it will recover – from an estimated R589 billion this year to over R800 billion in revenue in 2012-13 – from about 24,5% of GDP this year, to just over 26%.
Now, let’s compare this to a year ago when the tax to GDP ratio was close to 29%. The message here for ourselves and for the public is that it is going to take us a long time to get back to 29%. The money doesn’t just flow automatically; it is the outcome of broadening the tax base through policy measures and continual improvements in the law.
We also rely on the hard work of the revenue administration. But the baseline of any society and the foundation of any compliance is the honesty and integrity of taxpayers. Through its compliance model and, increasingly, as a benefit of its modernisation programme, the SA Revenue Service has the tools to narrow the tax gap, to pursue noncompliance, and ensure that everyone pays what is due.
Earlier this month Sars announced the implementation of sterner administrative penalties for those with outstanding tax returns. We have millions of tax returns that are outstanding. Some of these are from individuals who have not submitted tax returns for between two and five years. We have been very patient with these people until now, but the time has come to start imposing stricter penalties so that they comply with our tax laws. This will begin on 23 November this year with those who have repeatedly failed to submit returns.
I mention this, hon members, because there may be one or more listeners who are following this debate today and who have just 27 days left to ensure that they do not receive an early festive seasonal greeting card from Sars: “Appear in this court”.
Other forms of noncompliance will also come under the Sars spotlight in coming months. Included in this are the complicated tax structures – that still continue – and the use of offshore tax havens designed with the sole purpose of avoiding tax, under the false guise of limiting liability. I am sure all hon members know that tax havens are slowly becoming a thing of the past.
We must welcome the new commissioner, Commissioner Magashula, to the House
- if you could join me in doing that. [Applause.] Commissioner Magashula and the 15 000 women and men of Sars are building an efficient and effective enforcement capability, not just to target dishonest taxpayers, but to reduce the burden on honest taxpayers by ensuring that the responsibility of fiscal citizenship is shared by all South Africans.
We are also able to raise money through borrowing, which passes the tax burden, unfortunately, onto future generations. We will borrow carefully, I assure you, given the circumstances we find ourselves in.
Two years ago we ran a budget surplus, because economic conditions were unusually favourable and we knew we should be saving ahead of difficult times. Those difficult times are now with us and have been with us for about a year.
This year we will borrow 7,6% of GDP. Taken together with the funding requirements of the public entities, municipalities, Eskom and other state enterprises, the public sector borrowing requirement will be R285 billion, which is 11,8% of GDP.
I need to point out that, on these projections, government debt will increase from 23% of GDP in March this year to 41% by March 2013. Interest on state debt will increase from R54 billion last year, to just under R100 billion in 2012-13.
In our response to the global crisis, we will raise some R640 billion in debt over four years to sustain investment in job creation, education, health care, rural development and fighting crime.
This means that national debt will begin to rise again, and debt service costs will increase for a time as a share of government spending. What we are saying is that the more we borrow, the more interest we pay; the more interest we pay, the less we have to spend on the services we deliver.
We will bring the borrowing requirements down again in the years ahead, as economic growth improves. The framework proposed for the next three years has a consolidated budget deficit of 6,2% next year, declining to about 4,2% by 2012-13.
This fiscal response is possible because we began the economic decline with our finances in such excellent health. Special appreciation is therefore due to Minister Manuel for his sound stewardship of our public finances. [Applause.] But you can see what he left us with now. [Laughter.]
In a very real sense this has made possible the substantial shifts in the budget framework that the Cabinet tables before this House today. Higher borrowing is the right thing to do in these times, but we will also support our spending on priorities by vigorously conducting a campaign to reduce waste.
The budget process this year has therefore given emphasis to identifying savings. National departments have identified some R14,5 billion over the next three years in savings, and an estimated R12,6 billion will be reprioritised from redundant, ineffective or overpriced activities in provincial departments to finance core education, health and infrastructure requirements at provincial level. Let’s congratulate our bureaucrats on this achievement. [Applause.]
In municipalities and government agencies, similar spending on unnecessary travel and entertainment, unfocused consultant contracts, procurement supplies at uncompetitive prices … [Interjections.] … and layers of administrative paperwork that interfere with getting the job done, will be cut.
Today, Minister Baloyi, Minister Chabane and I, as mandated by Cabinet, are tabling our first preliminary report on saving and value for money. This is a little booklet you will see soon. This is the initial step in a long-term review of public expenditure. It is also evidence that this is not just talk. These are the first steps we are taking and there will be many more taken by Cabinet itself. We can understand the sceptics on our left.
We will also focus on specific programmes and public entities in which there are opportunities for doing things differently, and required reforms in supply-chain and procurement processes.
Members of the House will know that the MTBPS sets out a preliminary framework for the period ahead – that’s the next three years. Specific allocations will be tabled in February next year. Budget preparation is nonetheless well under way, and Cabinet has agreed to a division of resources that enables national and provincial departments to complete their spending plans.
The main Budget makes available an additional R78 billion over the next three years, of which R40 billion will go to provinces, mainly to accommodate higher personnel costs and for spending on education, health and housing.
Municipalities will receive over R12 billion over the next three years, for spending on infrastructure and to accommodate the effects of rising electricity and water costs on basic service delivery to poor households.
Funding for government employment programmes will be stepped up in several areas. An amount of R2,4 billion has been set aside for the National Skills Fund and the Unemployment Insurance Fund for the training lay-off scheme.
Public works programme allocations are included in funding flows to municipalities and various departments, aimed at creating 4,5 million job opportunities over the next five years.
Funds have been set aside for local community works projects in rural villages. In addition, options for supporting job creation by the business sector are under review, through better use of existing spending programmes, small business support agencies and tax incentives where appropriate.
Education is our largest budget commitment, comprising over R140 billion this year, and increasing to R185 billion by 2012-13. Building on the recently completed restructuring and recapitalisation of further education colleges, Minister Nzimande aims to increase participation to 20% of young people aged 18 to 24 over the next five years. A cumulative target of 350 000 industrial and related apprenticeships and scarce-skill learnerships has been set.
Under Minister Motshekga’s leadership, a new workbook programme was introduced this year, which will provide supplementary learning materials to 5,5 million school learners by 2012. This is aimed at improving literacy and numeracy in the foundation phase of schooling. [Applause.] Funding for the primary school nutrition programme will again be increased to reach 8,6 million children in 2012-13. I am also pleased to confirm that the Budget framework for next year will provide for the extension of the child support grant – as Cabinet has announced – up to the age of 18, over the next three years. [Applause.]
Ministers Molewa and Mdladlana and I are in discussion with the heads of Sars, the UIF and the Compensation Fund, the SA Social Security Agency, the Financial Services Board and other members of the interdepartmental team on the wider reform of the social insurance system. The aim is to achieve both better income protection for contributing employees and a rationalisation of the institutional arrangements. These are reforms in which unions and employers have substantial interest, and we need to draw on advice from all stakeholders.
Initiatives to strengthen public health services are important in laying the foundation for a national health insurance system. Public health expenditure is set to rise from R90 billion this year to R115 billion in 2012-13.
Minister Motsoaledi has asked me to emphasise that the restructuring of our health system comprises a 10-point plan, beginning with leadership and consultation amongst all interested parties. It includes an overhaul of management systems, improved human resource planning, better procurement of medical supplies, and investment in health infrastructure. Next year a vaccination campaign will be undertaken, he says, to reduce the incidence of measles and extend immunisation coverage. Government expenditure on the HIV and Aids programme will receive an additional R5,4 billion over the next three years. [Applause.]
Improved salaries have been agreed to for medical personnel. Public-private partnerships in the health sector will be stepped up, and a new quality assurance system will monitor service delivery improvement and compliance norms and standards.
Co-operation with the private sector and centres of research excellence will also be central to our agriculture and rural development strategy, under the leadership of Ministers Joemat-Pettersson and Nkwinti. Our programme seeks to improve training and productivity alongside rural infrastructure investment and enhanced support for beneficiaries of land restitution and land reform. At provincial level, total spending on rural development is projected to rise from about R6 billion at present, to about R8 billion in 2012-13. [Applause.]
Government continues to prioritise spending on housing and municipal infrastructure, in support of Minister Sexwale’s goal of eradicating informal settlements. An additional R1 billion will go to the housing grant programme, and R2,5 billion is proposed for municipal infrastructure grants. Our total expenditure on housing and community amenities will rise from R69 billion this year to over R98 billion in 2012-13. [Applause.]
Spending on transport will be over R65 billion a year over the Medium-Term Expenditure Framework, MTEF, period, including completion of the Gautrain project, major improvements to the Gauteng road network and initiation of public transport improvement programmes in 12 cities and metropolitan areas.
Public order and safety accounts for R79 billion this year, growing to over R100 billion in the next three years. Is Minister Mthethwa smiling? The Budget will provide for an additional 22 400 police personnel, aimed at strengthening detective services and crime intelligence. [Applause.]
Policing is part of an interconnected chain in crime prevention and the criminal justice system. Ministers Radebe, Mthethwa and Mapisa-Nqakula share a collective responsibility for the Security cluster, while Ministers Dlamini-Zuma and Cwele also have particular duties around that table. We are profoundly conscious of the enormity of these challenges, and the risks that tens of thousands of security personnel face on our behalf every day.
One example of the co-operation we have seen between enforcement agencies is the co-operation around the Tannenbaum case. Some of you will be aware that in June 2009 we requested an investigation into a gentleman called Barry Tannenbaum and his associates. Now, it has been discovered up to this point in time that 794 investors have been indentified as having participated in this scheme. It now appears as if the scheme involved approximately R12,5 billion in financial transactions. We know that one individual received more than R800 million in returns and is, in all likelihood, not being taxed on that sum. This scheme involved at least eight foreign jurisdictions through which this washing of money, if you like, took place.
I am pleased to announce, as informed by the people involved in the investigation, that warrants for the arrest of Barry Tannenbaum and Dean Rees have been issued today. [Applause.] I would like to compliment the SA Police Service, the National Prosecuting Authority and other members of the task team on the speed at which this investigation has unfolded as a result of their collaboration and joint work.
Ministers Mayende-Sibiya and Xingwana would remind us that our fight against crime is also part of the broader challenge of building social cohesion and creating opportunities for our young people. Crime has a major impact on our economy and indeed on our society and is undermining the ability of businesses and institutions to function normally. Our efforts have to include better vigilance against corruption and financial mismanagement in both the public and private sectors. We have stated our five strategic priorities for the medium term: creating jobs, enhancing education, improving health services, rural development and agriculture, and intensifying the fight against crime and corruption.
These are goals that translate into many programmes and policies, and countless institutional plans and activities. There are tens of thousands of office-bearers, officials, service providers and partner organisations whose efforts seriously contribute to our progressive realisation of these commitments.
I have in mind, for example, Mr Nditsheni Ramugondo, the principal of the Mbilwi Secondary School in Limpopo – that’s his photograph on the screen - whose school has, year after year, achieved 100% pass rates in the matric examinations. [Applause.] Asked to explain this success, Mr Ramugondo said that there was no miracle at his school, but that it was, rather, owing to the commitment of teachers and hard work by learners. [Applause.]
Sisonke singenza okuningi, kangcono nangalesisikhathi esinezinselelo ezingaka zomnotho! [Ihlombe.] [Together, we can do more and even better during this time when we are faced with so many economic challenges! [Applause.]]
I am learning, Mr President! [Laughter.]
Together we can do more and even better during these challenging economic times.
Nkosi Albert Luthuli once said, and I quote, that you can only preserve human values by propagating them and creating a climate where these values flourish.
The struggle for liberation in South Africa was accompanied by a set of values and cultures which permeated our society and our movement. These included respect for all, regardless of race or gender, a deep understanding that leaders serve communities, that they receive their power from ordinary people and that the privilege of serving one’s community must never be abused.
We are fighting a new struggle now. As Comrade Chris Hani once said, there is –
… another struggle to make freedom and democracy worthwhile to ordinary South Africans. We must build a different culture in this country and that culture should be one of service to the people.
[Applause.]
We are particularly concerned about the number of government tenders in all three spheres of government that are tainted by corruption. Corrupt officials stand on one side of this equation, while on the other stand corrupt businesspeople. A culture of gifts, wining and dining, and all manner of enticement has become pervasive in our society. We must act decisively against such a tendency, and we must do so together across the divides in this Chamber. [Applause.] We are called upon to make a special effort to protect the values on which our democracy is founded. Only then will we experience real freedom in our country, for all our people.
We recall former President Mandela’s words at his inaugural speech in 1994 when he said –
The task at hand will not be easy, but you have mandated us to change South Africa from a country in which the majority lived with little hope, to one in which they can live and work with dignity, with a sense of self- esteem and confidence in the future.
This remains our task and our challenge.
I need to express my appreciation to President Zuma for his leadership and guidance. Deputy President Motlanthe has also provided wise counsel. I am thankful for the support of the members of the Ministers’ Committee on the Budget, and for their keen collaboration in this process. I am thankful to members of the Treasury Committee who decided what additional appropriations should be allowed this year. I am thankful to premiers and provincial finance MECs who will carry a much greater burden in ensuring that our money is spent well in this year’s Budget adjustment process.
The preparatory work for the MTBPS has been a rapid learning curve for many of us, including me. A substantial decline in government revenue, alongside increases in spending requirements, has been something of a baptism of fire in the co-ordination of public finances.
I know that the House will join me in paying tribute to the work of the Auditor-General, Terence Nombembe, and his staff, and those who serve on audit committees and internal audit teams throughout our government. Let us congratulate them, please. [Applause.] Ongoing progress in their efforts is the foundation of both sound financial management and the ethic of responsible leadership that must pervade our public service reforms.
Allow me also to thank Mr Thaba Mufamadi, Mr Sogoni, and Mr De Beer, who chair the Standing Committees on Finance, Appropriations, and the Select Committee on Finance. They carry Parliament’s responsibility to interrogate the budgets. [Applause.]
The broader finance family - represented here today by Murray Michell, the head of the Financial Intelligence Centre, Paul Baloyi of the Development Bank of Southern Africa, Phakamani Hadebe of the Land Bank, and Brian Molefe of the Public Investment Corporation, all need to be congratulated on the excellent work they do. [Applause.] Under their leadership, our development finance institutions are adapting to new roles and responsibilities, consistent with our economic and development challenges.
We are also privileged to have the SA Reserve Bank represented by its Deputy Governors today, and, on your behalf, I would like to welcome Ms Gill Marcus as the incoming Governor of the Reserve Bank. [Applause.]
Our thanks go to Governor Mboweni for the contribution he has made to our economy and indeed our country. Let’s give him another round of applause please. [Applause.]
It is my pleasure, as I did earlier, to introduce the new Commissioner of the SA Revenue Service – the man you are now going to call “the taxman” - Mr Oupa Magashula. He brings a new capability to the leadership of Sars.
I am fortunate to be able to share my responsibilities and duties with Deputy Minister Nhlanhla Nene who gave me a quick Zulu lesson before I came here … [Applause.] … whose energy and insight are invaluable.
Director-General Lesetja Kganyago – who is becoming a veteran of the bureaucracy now – leads the National Treasury with exemplary professionalism and passion, and heads a team of which we can all be proud. [Applause.]
I hereby submit the 2009 Medium-Term Budget Policy Statement to Parliament, and I table the Adjustments Appropriation Bill for the consideration of the National Assembly. Thank you very much. [Applause.]
The SPEAKER: We thank the hon Minister of Finance for his Medium-Term Budget Policy Statement.
Hon members, the Medium-Term Budget Policy Statement will be referred to the Standing Committee on Finance and the Standing Committee on Appropriations to consider in accordance with their respective mandates. The Adjustments Appropriation Bill will be referred to the Standing Committee on Appropriations for consideration and report.
WELCOMING OF DELEGATION FROM SUDAN, AND OF MRS GORDHAN, WIFE OF THE
MINISTER OF FINANCE
The SPEAKER: Hon members, I would like to acknowledge the presence in the gallery of a parliamentary delegation from the Sudan, comprising 13 people from the economic affairs committee of the Sudan National Assembly and the public accounts committee from the Southern Sudan Legislative Assembly. Hon members, you’re welcome! [Applause.]
I would also like to acknowledge in the gallery a special person that the Minister omitted to acknowledge, and that is Mrs Pravin Gordhan, the companion, wife and pillar of the Minister. [Applause.] You are most welcome! [Applause.]
CONSIDERATION OF REQUEST FOR APPROVAL OF CANDIDATE RECOMMENDED FOR APPOINTMENT TO COUNCIL OF INDEPENDENT COMMUNICATIONS AUTHORITY OF SOUTH
AFRICA, ICASA
The SPEAKER: I call the hon chairperson of the committee.
Mr I VADI: Mr Speaker, thank you very much for the beautiful flowers you’ve laid out for me. [Laughter.] I also extend great thanks to Minister Gordhan for the R200 million he has given to the SABC. I think they really deserve that money and it will help them with their cash-flow problems.
Early last month I reported to the House that the Portfolio Committee on Communications had completed the process of interviewing candidates for a vacancy in the Council of the Independent Communications Authority of SA, Icasa. The committee, and subsequently this House, recommended two candidates for appointment to the Minister of Communications. They were Mr Khulile Boqwana and Mr William Stucke. The Minister had to decide on either one of the two candidates and refer the matter back to the House for a final decision.
The Minister has now done so. He recommends that Mr William Stucke be appointed to the Icasa Council. The committee, this morning, agreed to support the Minister’s decision.
This is not your typical political appointment. This is not a mere affirmative-action placement. And this is not an appointment that the Minister had predetermined even before the parliamentary process had begun.
Minister Nyanda has considered the matter very, very carefully. He has taken into account many challenges that beset Icasa. He has opted for the candidate with the best possible technical skills and competencies, and the committee agrees with this refreshing approach.
Mr Stucke has a broad and in-depth understanding of technical and regulatory matters relating to the ICT sector. He has a BSc Honours degree in engineering and he is a certified electrical engineer. He has served as the chairman of the African Internet Service Providers Association. He is also the treasurer of the Internet Service Providers Association of SA. He designed and built the first fibre-optic Ethernet network in an underground mine, in our country. Taking these strengths into account, the committee is of the view that Mr Stucke will make an invaluable contribution to Icasa.
I have reported to the House previously that the committee was less than satisfied with the overall performance of Icasa. The committee is continually receiving negative feedback on administrative inefficiencies within Icasa. Icasa has not been successful in processing a number of regulatory decisions on the basis of proper and legally defensible procedures.
Only a few weeks ago, when the committee undertook an oversight visit to Icasa’s offices, it discovered that there was no real cohesion between the Icasa councillors and its senior executive management. Here was a case where the left hand did not really understand what the right hand was doing. Lastly, I think by now we all acknowledge that Icasa had failed dismally to regulate interconnection rates in the cellphone industry.
Icasa cannot continue in this way, or in the way it has done over the past few years. It has to get its act together. The appointment of Mr Stucke signals, hopefully, that this is not business as usual. Mr Stucke strikes one as a person with energy, enthusiasm and passion. He has a good grasp of the legal issues at stake. And he is impatient to get on with the job of bringing about some change to Icasa.
The committee shares this sense of urgency. It, therefore, recommends that the House approve the nomination of Mr William Stucke to serve on the Council of Icasa. Thank you very much. [Applause.]
There was no debate.
Declaration of vote:
Mr N J VAN DEN BERG: Hon Speaker, hon President, hon Deputy President and hon members of this House, it is indeed a joyous day for me personally and for our dynamic party, the DA.
The fact that the Minister of Communications appointed Mr William Stucke to the board of Icasa shows that the DA is always correct and right in their decisions. After I worked through the 86 nominations for one vacant position on the Icasa board, I put forward Mr Stucke’s name - as the priority candidate - on the DA’s list. Initially, the DA struggled to get Mr Stucke short-listed for the interviews. At the end, the ANC agreed to put his name on the list.
Hon Speaker, this House can guess who made the biggest impact owing to his knowledge in the field of electronic communications: Mr William Stucke, the DA’s preferred candidate.
Nevertheless, the ANC picked their candidate. Two names were put to this House, Mr Stucke not being their preferred candidate. I want to congratulate the hon Nyanda on putting forward Mr Stucke’s name to this House for the vacant position on the Icasa board.
There is no doubt that William Stucke was the best candidate for this position as he stood head and shoulders above the other candidates on the shortlist owing to his strong technical knowledge and his standing in the local telecoms arena.
The Icasa Council is not known for its strong technical skills, as indicated by their lack of decisive action in the lowering of interconnection rates and the issuing of licences.
Stucke’s knowledge will definitely increase the capacity of the regulator to address certain complicated technical matters at council level. Stucke is a telecoms and Internet veteran, and has held numerous management positions in the local and … [Time expired.] [Applause.]
Question put: That the recommendation of Mr W Stucke for appointment as councillor to fill a vacancy on the Council of the Independent Communications Authority of South Africa be approved.
Question agreed to.
Mr W Stucke accordingly approved for appointment as councillor to fill a vacancy on the Council of the Independent Communications Authority of South Africa.
MEETING OF PAN-AFRICAN PARLIAMENT UNDER NEW PRESIDENT
(Member’s Statement)
Dr G W KOORNHOF (ANC): Mr Speaker, the Pan-African Parliament, the PAP, is an organ of the African Union which was formed in 2005 to promote democracy and conflict resolution on the continent. The new MPs met for the first time under the leadership of the new President, Idriss Déby, of Chad, on 22 October 2009 in Midrand. The first ordinary session focused on the review of the protocol that established the PAP in a bid to give the parliament a full legislative role.
Speaking at the opening of the PAP’s first ordinary session on Monday, 26 October 2009, President Zuma reminded the delegates that parts of the African continent were still plagued by war and conflict, political instability, and the removal of governments by unconstitutional means. However, President Zuma acknowledged an important role that the parliament had played in contributing towards free, fair and transparent elections in a number of countries. Therefore, President Zuma has called upon the PAP to move with speed in ensuring that its deliberations strengthen the promotion of peace, development, democracy and economic growth.
The ANC is also encouraged by the fact that the PAP will soon be able to transform itself from an advisory body into a legislative body. I thank you. [Applause.]
FRAUD AND CORRUPTION AT LAND BANK
(Member’s Statement) Dr L L BOSMAN (DA): Hon Chairperson, the DA is shocked and dismayed that the fraud and corruption identified at the Land Bank has not yet been resolved. This follows media reports of corrupt government officials appropriating almost R100 million intended to benefit the poor in order to improve their living standards.
Allegations reported this week in the Sunday Times about fraud in the Agricultural Black Economic Empowerment Fund are not at all new. Shocking as they are, most have been in the public domain for some time now.
Apart from this alleged fraud, there are also other allegations of fraud and mismanagement which have been investigated and reported on. Forensic reports have been handed to investigating authorities such as the police, the Scorpions, the Hawks and the National Prosecuting Authority. Some of the reports have enough evidence to build charges of corruption against numerous individuals, but nothing has happened. Some cases date as far back as 2006 and 2007. The longer the fraud and corruption identified in the Land Bank drags on without resolution, the more it would appear that the people responsible for this greed are being protected from prosecution.
In his state of the nation address, the President made a commitment to the South African public to root out the pervasive corruption that has taken over the South African conscience. We have also just had Minister Gordhan again make a statement about this. Thank you. [Time expired.] [Applause.]
SUNDAY TIMES REPORT ON CORRUPTION AT LAND BANK
(Member’s Statement)
Rev H M DANDALA (Cope): Hon Chairman, on behalf of Cope, I would like to congratulate the Minister of Finance on his commitment and strong determination to fight and overcome corruption.
On 25 October 2009, the Sunday Times disclosed that a total of R100 million of Agricultural Black Economic Empowerment Fund money meant for poor farmers had been used to bankroll the lavish lifestyles of some individuals to buy homes and luxury cars.
This deplorable and despicable action, which has been confirmed by the CEO of the Land Bank, must rank as one of the most heartless, shameless and perfidious acts ever perpetrated against the poor. It is not to be countenanced or tolerated.
There is clearly a challenge for all of us in South Africa to live prudently. A culture is growing fast in terms of which more people are aspiring to having things beyond their means. And to make up for the shortfall which arises from such extravagance, they dip into public funds. This is unacceptable.
The government must act decisively and subject all such people to the full rigour of the law. Otherwise, the blemish on the government will grow daily. Specifically, this honourable House must be told what investigations are in place to determine the veracity of these claims by the Sunday Times.
REOPENING OF ARMS DEAL
(Member’s Statement)
Mr A R AINSLIE (ANC): Chairperson, the ANC supports the decision taken by the Standing Committee on Pubic Accounts and unanimously supported by all parties, including the DA, at its meeting on 29 January 2008 that, “The reopening of the arms deal will only be considered if new evidence was brought to light.” The ANC notes that the material now being peddled by the DA to the media is not new evidence, but merely one of several Joint Investigation Task Team drafts compiled for discussion purposes prior to the final JITT report on this matter.
The ANC condemns the DA for, once again, sneaking documents to the media before the relevant committee, in this case Scopa, has had time to deliberate on them. The ANC reiterates the findings in the 15th report of Scopa, dated 11 December 2001, based on the final Joint Investigation Task Team report and passed as a resolution of this House on 19 September 2002 that, “No evidence was found of any improper or unlawful conduct by the government.”
The ANC calls on any person who believes that they have new evidence on this matter to report this to the appropriate authority. Thank you. [Applause.]
VIOLENCE AGAINST WOMEN AND CHILDREN
(Member’s Statement)
Mr R N CEBEKHULU (IFP): Chairperson, it is with great disappointment that we note that our communities, particularly women and children, are still exposed to unsafe environments because very often they are sexually harassed, raped and strangled to death. Not a day goes by without reports of rape or assault being committed by senseless criminals. Members of our communities fear for their lives while walking to school or to work in the face of violent crimes such as rape and sexual harassment, which also contribute to the spread of HIV and Aids.
We note with great sadness that the recent crime statistics released show that the rate of reported sexual offences increased by 10%. As the 2009 “Sixteen days of activism for no violence against women and children” campaign comes to a close, we would like to remind South Africans that universal human rights cannot be realised unless women and children have the right to live free of violence.
As a nation, we need to ensure that gender concerns, including violence against women, are featured prominently in our activities. Our correctional services also need to act against the perpetrators of these offences in our prisons. It is high time that the perpetrators of these horrible acts are dealt with very harshly by our criminal justice system. I thank you.
REITZ FOUR
(Member’s Statement)
Mr N M KGANYAGO (UDM): Chairperson, the UDM notes with concern the manner in which the issue of the so-called “Reitz four” is being handled by certain people and organisations. As we noted when this issue was first exposed, the disgraceful and barbaric acts committed by these four young men were highly offensive to our sensibilities as a nation. They showed utter disclain for the dignity of people who were their elders and acted in a manner that was both racist and sexist.
The UDM also points out that there was general agreement amongst most South Africans about the despicable nature of this incident. We should be united jointly in our diversity to face a case such as this and show in our united behaviour that racism, sexism and intolerance in any form are not the way of the new democratic dispensation.
Since then the rector of the University of the Free State has announced that these men will not be punished forever by the institution. Of course, this has no bearing on the criminal prosecution process that is under way. Whether Prof Jansen’s announcement is acceptable is open to debate, but the reaction has been vitriolic.
The UDM is disappointed by people from the ruling alliance who claim to be campaigning against intolerance by showing such unadulterated intolerance towards Prof Jansen, culminating yesterday in one of these spokespersons talking about shooting and killing. I’m sure we will hear again about being quoted out of context. Thank you. [Time expired.] CLEAN-UP CAMPAIGN IN BORDER TOWNS
(Member’s Statement)
Mrs M C MABUZA (ANC): Chairperson, the ANC supports the launch of an awareness campaign at Beitbridge border post by the South African Department of Water and Environmental Affairs and the Zimbabwean environment department on Friday, 16 October 2009. The objective of this campaign is to create awareness amongst all communities residing in the vicinity of South African borders to take care of their environment.
The clean-up campaign is the first of its kind and is not limited to cleaning the borders. It will also be used to highlight other critical environmental issues, including climate change, air quality and the need for the continent to forge strong links on matters relating to sustainable development.
The campaign will be rolled out to other countries sharing borders with South Africa, including Botswana, Lesotho, Swaziland, Namibia and Mozambique. The ANC appreciates the clean-up campaign, which will strengthen working relations on issues of the environment among countries sharing borders with South Africa. I thank you, Chairperson. [Applause.]
EXPLOITATION OF POLITICAL ASYLUM
(Member’s Statement)
Mr M A MANGENA (Azapo): Chair, Brandon Huntley, a South African male, applied and was granted political asylum in Canada on the grounds that he was allegedly a victim of crime in his own country.
People like Brandon Huntley exploit the human rights credentials of the country of their destination as well as the ignorance of the relevant authorities about the state of affairs in their home countries.
Are we sure there are no Brandon Huntleys from other democracies in Southern Africa who are exploiting our human rights credentials and the ignorance of some of our officials about the goings-on in their countries? With South Africa having been a victim of Brandon Huntley, our relevant officials should make sure that we do not embarrass ourselves and other democracies by harbouring and granting a Brandon Huntley asylum. I thank you. [Applause.]
MATRIC EXAMS AND OUTCOMES-BASED EDUCATION
(Member’s Statement)
Mr A M MPONTSHANE (IFP): Hon Chairperson, the IFP would like to wish all learners, especially our Grade 12 learners, the best of luck during their final examinations which started countrywide yesterday. We urge learners to approach these examinations with commitment and dedication, and with the knowledge that doing well in these examinations will be a tool to a brighter future for all. The IFP hopes that the 2009 matric pass rate will exceed the 2008 pass rate. But if the pass rate remains in a downward spiral, we hope that the government will seriously consider abandoning the outcomes-based education system.
The IFP warned from the outset that outcomes-based education was doomed in South Africa because it had failed in other countries years before the ANC- led Department of Education thought it was a workable concept for South Africa. The IFP has been vindicated by the consistently poor performance of South African learners in international maths and literacy tests.
We now need the government to invest in an education model that will see our learners emerging from school ready for further education, and as highly employable individuals in a country which is crying out for skills. I thank you.
WITHDRAWAL OF INTERNAL CHARGES BY FREE STATE UNIVERSITY AGAINST REITZ FOUR
(Member’s Statement)
Mrs F F MUSHWANA (ANC): Hon Chairperson, the ANC is concerned about the dropping of the internal charges by the University of the Free State and the possible withdrawal of the criminal charges against the former students who abused black workers in the institution.
Contrary to the claim by Prof Jansen that dropping the internal charges and welcoming the students back to the institution will lead to reconciliation at the university, the view of the ANC is that this will not lead to reconciliation but will, again, harden racial attitudes, not only in the university but in the country in general.
The ANC believes that the judicial process should have been given a chance before deciding to withdraw the internal charges and that could have helped in correcting the former students’ behaviour to conform to a democratic and nonracial South Africa. Dropping these charges has robbed the former students, their victims, the university, and South Africa of such corrections.
Perhaps at the end of the judicial process, all of us would have been persuaded to forgive the former students. After the conclusion of the judicial process we would have been able to be apprised of the students’ attitude towards their actions, and of their probable show of remorse for their actions.
The ANC welcomes the University of the Free State’s decision to reopen the consultation process with regard to the four students who allegedly humiliated workers as something that should have been done before the announcement was made. I thank you. [Applause.]
OUTBREAK OF MEASLES IN PRISON
(Member’s Statement)
Mr A T FRITZ (DA): Chairperson, the DA notes the outbreak of measles at the Johannesburg Medium A Correctional Centre with extreme concern.
The overcrowded conditions at this facility have exacerbated the prevalence of this disease. Not only does the overcrowding lead to gangsterism and make rehabilitation impossible, but it also encourages the outbreak of infectious diseases.
Overcrowding is a serious issue which needs to be addressed. Some correctional centres in South Africa have an average of two inmates per allocated bed.
This measles outbreak highlights the inability of the Department of Correctional Services to adequately manage health services in massively overcrowded correctional centres in South Africa. I thank you.
EXPULSION OF MAYORAL COMMITTEE FROM STANDERTON STADIUM
(Member’s Statement)
Mr D A KGANARE (Cope): Chairperson, Cope is concerned about the continual activities of the ANC in showing no respect to the Constitution of this country. This has been indicated by the ANC’s expulsion of the whole mayoral committee of Standerton at a stadium.
Cope believes that there are legal procedures that have to be followed if a municipality’s powers have to be recalled. The ANC has no respect for this Constitution because it sent the Deputy Minister of Police, who was not responsible for local government issues, together with Mr Malema, who is not a member of the Cabinet, to fire the whole council.
The confusion caused by the ANC by showing no respect for the Constitution is a clear indication that they do not have any understanding of the difference between the party and the state. [Interjections.] As Cope, we would like to warn the ANC that what they are planting they will reap. Thank you. [Interjections.] [Applause.]
WELCOMING OF NEW BILATERAL INTERNATIONAL AGREEMENT ON HIGHER EDUCATION AND TRAINING
(Member’s Statement)
Mr Z S MAKHUBELE (ANC): Chairperson, the ANC welcomes the new bilateral international partnership between the South African government, the Department of Higher Education and Training and the United States Agency for International Development, USAID, which was launched on Tuesday, 20 October 2009.
The newly formed partnership is aimed at strengthening academic programmes, skills development training and student support services at 12 selected further education and training colleges in South Africa. The US$6,7 million programme will operate over a three-year period at FET colleges in Limpopo, Mpumalanga and the Northern Cape, and will be implemented by the American Council on Education and the American Association of Community Colleges.
This initiative is part and parcel of the ANC government’s mandate to place further education and training colleges at the centre of a popular drive to transfer skills to our people, including providing institutions with more resources and scaling up dedicated bursary schemes to popularise and subsidise attendance at FET institutions. Thank you. [Applause.]
MISMANAGEMENT AND FRAUD ALLEGATIONS AGAINST CEO OF ROAD TRAFFIC MANAGEMENT CORPORATION
(Member’s Statement)
Mr S B FARROW (DA): Chairperson, the DA has in its possession a number of documents that suggest that the mismanagement and fraud allegations against the chief executive officer of the Road Traffic Management Corporation, Ranthoko Rakgoale, were well founded. These documents have been provided to the DA by a number of whistle-blowers at the RTMC.
It is alarming that despite the existence of these documents, which indicate pervasive fraud and corruption and mismanagement at the hands of Mr Rakgoale, he has not been suspended and is still firmly in his seat as chief executive officer of the RTMC. These documents indicate that there are indisputable and clear grounds that show the chief executive officer must be suspended, followed by a full and independent investigation.
The allegations against Mr Rakgoale first came to light in a Sunday Times article on 7 July 2009. At that time, the DA called for an investigation into these allegations and subsequently wrote three letters to the Minister of Transport, requesting Ranthoko Rakgoale’s suspension, pending a full investigation. No reply was received from the Minister.
The DA then raised the issue in a meeting of the Portfolio Committee on Transport, and the chairperson there agreed to liaise with the Minister in this regard. The DA further issued numerous parliamentary questions to the Minister, with the hope of obtaining clarification on the matter, and only two of these questions were answered.
These documents prove this matter is no longer a subject for debate. They categorically prove that there was an extensive series of highly problematic undertakings involving the chief executive officer.
Thus, the DA believes the following must happen. It is clear that there has been sufficient evidence for the chief executive officer to be investigated; it is unclear why such investigations have not been carried out.
In light of this evidence, the DA calls for the immediate suspension of the RTMC chief executive officer. Should the immediate suspension of the chief executive officer not occur, the DA will seriously consider laying charges itself. Thank you. [Time expired.] [Applause.]
LAUNCH OF E-CADRE PROGRAMME FOR YOUTH DEVELOPMENT
(Member’s Statement)
Ms S R TSEBE (ANC): Hon Chairperson, the ANC has embarked on an integrated programme on rural development, land reform and agrarian change, based on the provision of social and economic infrastructure and the extension of quality government services, particularly health and education for rural areas.
As a result, the Department of Communications has officially launched an e- cadre programme, which offers information communication technology training to unemployed youths from rural areas. Through this programme, thousands of youths will be recruited to provide technical support in respective service deployment areas, such as clinics and police stations, where they can assist communities to access government services through the use of information and communication technology.
Furthermore, the programme provides young people between the ages of 18 and 30 with an opportunity to contribute towards civic responsibility and reconstruction, while acquiring skills to enhance their entrepreneurial capacity.
The ANC believes that the participation of the poor in the design, implementation and monitoring of rural development programmes is a key objective of the developmental state and must be supported by the appropriate structures so as to give a voice to affected communities. Ke a leboga. [Thank you.] [Applause.]
EXPULSION OF MAYORAL COMMITTEE FROM STANDERTON STADIUM
(Minister’s Response) The MINISTER OF SPORT AND RECREATION: Chairperson, I want to correct some of the perceptions created in this House by the hon Papi Kganare. He should know the laws of this country. The chorus that is shouting next to him should know the laws of this country as well.
There is no Minister, there is no MP, there is no ordinary citizen of this country who can go to a municipality and dissolve a council. There is nothing like that. [Interjections.]
The HOUSE CHAIRPERSON (Mr M B Skosana): Order! Order, please!
The MINISTER OF SPORT AND RECREATION: He knows it. All of us know it. To make those allegations is a simple aberration of the truth. I just wanted to make that correction, Chairperson. Thank you very much. [Applause.]
The HOUSE CHAIRPERSON (Mr M B Skosana): The Minister of Home Affairs? Oh, I’m sorry, the Minister of Correctional Services. I still think of you in terms of your past life.
OUTBREAK OF MEASLES IN PRISON
(Minister’s Response)
The MINISTER OF CORRECTIONAL SERVICES: Chairperson, I agree with Mr Fritz that indeed it becomes even more difficult to manage an outbreak of a disease in the situation in which we find ourselves at the Department of Correctional Services. Obviously, there are challenges with overcrowding and I accept that. But overcrowding has nothing to do with the outbreak of measles right now.
I think we are all aware there is an outbreak of measles in the country, particularly in Gauteng. What is of interest is that the areas where we have this outbreak are the centres where we keep our awaiting-trial detainees. This is a highly mobile community. These are people who go in and out of the courts and then go back to the centres. So, one would expect that these people would carry whatever virus or pandemic is out in the communities from where they come, into the detention centres. That is the one matter.
Secondly, we are trying very hard to manage a very difficult situation. We all know that measles kills; it’s a viral infection and it does kill. But, for now, of the 6 000 awaiting-trial detainees, only 58 are affected. Those who are affected have been quarantined. They have been put in isolation so that there is no further spread of the disease.
We have also put measures in place to ensure that those awaiting-trial detainees do not appear in court this week. Obviously, there is a concern that this is going to lead to a backlog, but, in the interests of public health, we had to make sure that we kept them in one place. We are keeping them in isolation so that they don’t interact with members of the public. Thank you.
MISMANAGEMENT AND FRAUD ALLEGATIONS AGAINST CEO OF ROAD TRAFFIC MANAGEMENT CORPORATION
(Minister’s Response)
The MINISTER OF TRANSPORT: Chairperson, I would like to thank the hon Farrow very much for the question. We have responded – and he acknowledged that we did respond to his letter – and we want to assure him that we regard the issues he raised concerning the Road Traffic Management Corporation as being very serious. They are very serious even just in terms of the fact that 14 000 people die on our roads each year.
The RTMC is actually quite central to all the measures we are putting in place, including the new legislation, the Administrative Adjudication of Road Traffic Offences Act. Therefore, we are dealing with the matter of the CEO of the RTMC. The investigation is ongoing and we hope to conclude it very soon.
All of us share the same concern. The concern that he raised, we share with the Deputy Minister here. It’s a valid concern, and we are dealing with it. Thank you.
EXPULSION OF MAYORAL COMMITTEE FROM STANDERTON STADIUM
(Minister’s Response)
The DEPUTY MINISTER OF POLICE: Chairperson, I just want to add to what the Minister of Sport and Recreation said about Standerton.
Just to put the record straight: no decision has been taken to recall anyone that was in the stadium. This is an exaggeration and an unfounded poor fabrication from desperate forces who seek to be popular at the expense of the truth. Nonetheless, this is not new.
The ANC reserves its right as a political party to deploy and recall based on the mandate that was bestowed on it by the people of South Africa. [Applause.] So, we have done what is within our rights and recalled our public representatives in the best interests of ensuring stability in Standerton. This was not done for the sake of poor people who simply think that they can thrive on untruths about the ANC. Thank you. [Applause.]
REITZ FOUR
(Minister’s Response)
The MINISTER OF CORRECTIONAL SERVICES: Chairperson, I suspect that it would be incorrect to mislead one another on a very sensitive matter in the country right now - the Reitz Four. I think it is appropriate that I respond on behalf of the ANC.
I think this is a very explosive situation and requires all of us, particularly those of us who are in this House, to handle it with great sensitivity so that when we go out to our constituencies we understand fully the implications of reconciliation. This is so that when you talk about reconciliation, it starts with a confession, it starts with forgiveness, it starts with a healing process.
I think this is a painful process, which we have all been going through in this country since 1994. Therefore, even in the case of these young men, I think all of us, as parents, as mothers, should be quite sympathetic to the four young men, who should be at school, who should be learning, so that tomorrow they can be leaders of this country.
However, it was important for Prof Jansen, as he took the decision, to take into consideration the principles of restorative justice and to have broader consultation with the people affected, the victims, and the families of those who have offended. This is so that at the end of the day when you reach an agreement, when you reach a decision which is likely to whip up the emotions of the South African public, you know that you have the backing of all South Africans. I think this is what the people are saying here.
I think South Africans have gone beyond the period of retribution and wanting to take revenge. We have gone through that period. What we want, though, if you have done wrong is that you have the humility to confess and apologise and let your victims accept, and you heal and reconcile. I think these are the fundamentals of reconciliation.
I don’t really think there are any normal-thinking South Africans who have bad wishes for these young boys. Personally, I am a mother of four boys. I don’t wish that because these are white children, that they should not be provided an opportunity to get an education. First things first, and this must be done in the correct way. Thank you. [Time expired.] [Applause.]
WELCOMING OF NEW BILATERAL INTERNATIONAL AGREEMENT ON HIGHER EDUCATION AND TRAINING
(Minister’s Response)
The DEPUTY MINISTER OF TRADE AND INDUSTRY (Mrs T V Tobias): Hon Chairperson, I want to respond to the statement on skills development. I think this country has moved to the point where we have acknowledged the need to diversify and to have technological innovations to the point where investment in youth is an imperative.
Even the Minister of Finance, in his Medium-Term Budget Policy Statement today, indicated the need to have a paradigm shift in ensuring that we invest in skills development.
Therefore, the statement made by the hon Silence Makhubele is relevant. It is accepted that all government departments will indeed commit themselves to ensuring that young people are empowered to be able to participate in the mainstreaming of the economy. I thank you. [Applause.]
NOTICES OF MOTION
Mr S B FARROW: Chairperson, I hereby give notice that I shall move on behalf of the DA:
That the House debates, in recognition of Transport Month, the high incidence of road deaths in South Africa and the impact that it has on the economy, and come up with possible solutions.
Mrs C DUDLEY: Chairperson, I hereby give notice that I shall move on behalf of the ACDP:
That the House debates whether or not the strategy of the Department of Public Enterprises to raise funds speedily for new power stations from domestic consumers over five years is necessary considering that such power facilities earn substantial income for 50 years or more, which could make them self-funding if they borrowed accordingly, independent of consumer increases.
Dr W G JAMES: Chairperson, it may not come as a surprise to this House given the theme of today’s plenary that I hereby give notice that I shall move on behalf of the DA:
That the House debates the graduation rates of our students at universities, both in terms of individual achievements as well as the quality of degrees, and discusses solutions thereto.
Ms A MDA: Chairperson, I hereby give notice that I shall move on behalf of Cope:
That the House –
1) debates the revelation of the Auditor-General’s report that this
country’s 63 municipalities are in a state of collapse, which is a
serious concern to Cope; and
2) notes the fact that most of those municipalities have not been able
to account to the Auditor-General how they used public money.
OBSERVANCE OF UNITED NATIONS DAY
(Draft Resolution)
The DEPUTY CHIEF WHIP OF THE MAJORITY PARTY: Chairperson, I move without notice:
That the House -
1) notes that 24 October 2009 marks the annual observance of United
Nations Day;
2) further notes that this day is marked throughout the world by
activities aimed at raising awareness of the goals and achievements
of the United Nations;
3) acknowledges that the United Nations is looked to by all its member
states to provide leadership in responding to the full range of
global challenges facing human civilisation in the 21st century,
and that it embodies our collective aspirations for a world free of
poverty and suffering, a world characterised by international
peace, security and respect for human rights;
4) believes that for the organisation to meet the immense set of
global challenges and the wide diversity of needs of its member
states, a renewed, revitalised and more responsive United Nations
is needed; and
5) expresses its support for the ongoing efforts of the South African
Government in this regard and particularly the views expressed by
President Zuma during his address at the 64th session of the UN
General Assembly on 23 September 2009, that no reform of the UN can
be complete without fundamental reform of the Security Council and
that the legitimacy of the Security Council’s decisions will
continually be questioned without permanent representation for
Africa.
Agreed to.
ELECTION OF NEW CHAIRPERSON AND DEPUTY CHAIRPERSON OF SA HUMAN RIGHTS
COMMISSION
(Draft Resolution)
The DEPUTY CHIEF WHIP OF THE MAJORITY PARTY: Chairperson, I move without notice:
That the House-
1) notes that Adv Lawrence Mushwana and Ms Pregs Govender have been
elected as the new chairperson and deputy chairperson respectively
of the SA Human Rights Commission, SAHRC, with effect from 1
November 2009;
2) further notes that Ms Pregs Govender is a former ANC MP and Adv
Mushwana was the country’s Public Protector and a former ANC MP;
3) recognises that the SAHRC has an important mandate to monitor and
access the realisation of human rights;
4) further recognises that this mandate of the SAHRC is of particular
significance given our country’s history of discrimination based on
its apartheid policy which was designed to separate black and white
South Africans in order to oppress, dominate and control blacks,
and to enrich white South Africans at the expense of the oppressed
black majority; and
5) welcomes the appointment of Adv Mushwana and Ms Pregs Govender and
wishes them and their fellow commissioners well in discharging
their new responsibilities.
Agreed to.
The House adjourned at 15:51. ____
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS
THURSDAY, 22 OCTOBER 2009
ANNOUNCEMENTS
National Assembly
The Speaker
- Membership of Committees
a) The following changes have been made to the ANC membership of the Ad
Hoc Committee on the Green Paper on National Strategic Planning –
September 2009:
Appointed:
Gungubele, Mr M
Makhubela-Mashele, Mrs L S
De Lange, Adv J H
Mabasa, Mr X
Discharged:
Mashishi, Ms A C
Mataboge, Mr D K
Nhlengethwa, Ms D G
Suka, Mr L
b) The following changes have been made to the committees listed below:
PC on Human Settlements
ACDP
Discharged:
Dudley, Mrs C
PC on Social Development
ACDP
Appointed:
Dudley, Mrs C (Alt)
FRIDAY, 23 OCTOBER 2009
ANNOUNCEMENTS National Assembly
The Speaker
- Correspondence from the Minister of Justice and Constitutional Development
1) A letter dated 15 October 2009 has been received from the Minister
of Justice and Constitutional Development, informing members of the
National Assembly that the President, on the recommendation of the
House, appointed the following persons to the Human Rights
Commission in terms of section 193 of the Constitution, read with
section 3 and section 11 of the Human Rights Commission Act (Act No
54 of 1994):
a) Adv B J Malatji, as a full-time commissioner for seven years
with effect from 1 October 2009;
b) Ms L Mokate, as a full-time commissioner for seven years with
effect from 1 October 2009;
c) Adv L M Mushwana, as a full-time commissioner for seven years
with effect from 15 October 2009;
d) Ms J Love, as a part-time commissioner for seven years with
effect from 1 October 2009; and
e) Dr T Titus, as a part-time commissioner for seven years with
effect from 1 October 2009.
2) A letter dated 15 October 2009 has been received from the Minister
of Justice and Constitutional Development, informing members of the
National Assembly that the President, on the recommendation of the
House, appointed Ms Thulisile Nomkhosi Madonsela as the Public
Protector of South Africa with effect from 15 October 2009 in terms
of section 193 of the Constitution, read with section 1A of the
Public Protector Act (Act No 23 of 1994).
TABLINGS
National Assembly and National Council of Provinces
- The Minister of Water and Environmental Affairs
(a) Report and Financial Statements of the Inkomati Catchment
Management Agency for 2008-09, including the Report of the
Independent Auditors on the Financial Statements and Performance
Information for 2008-09 [RP 147-2009].
National Assembly
- The Speaker
1) Declaration of an amnesty in terms of section 139(2)(a) of the
Firearms Control Act, 2000 (Act No 60 of 2000).
Referred to the Portfolio Committee on Police for consideration and
report.
2) Report of the Public Protector in terms of sections 8(1) and
8(2)(b)(i) of the Public Protector Act, 1994 (Act No 23 of 1994),
on a preliminary investigation relating to electricity load-
shedding implemented by Eskom Holdings Limited.
Referred to the Portfolio Committee on Energy and the Portfolio
Committee on Public Enterprises for consideration.
MONDAY, 26 OCTOBER 2009
ANNOUNCEMENTS
National Assembly and National Council of Provinces
The Speaker and the Chairperson
-
Calling of Joint Sitting
The Speaker and the Chairperson received a message, dated 21 October 2009, from the President, requesting that a Joint Sitting of the National Assembly and the National Council of Provinces be convened: CALLING OF JOINT SITTING OF PARLIAMENT
In terms of section 42(5) of the Constitution of the Republic of South Africa, read with Joint Rule 7(1)(b) of the Joint Rules of Parliament, I hereby call a joint sitting of the National Assembly and the National Council of Provinces on Wednesday, 11 November 2009 at 14h00, in order to bid farewell to the outgoing Chief Justice Pius Langa, and to welcome the incoming Chief Justice, Sandile Ngcobo.
Yours sincerely Signed MR J G ZUMA PRESIDENT OF THE REPUBLIC OF SOUTH AFRICA
TABLINGS
National Assembly
-
The Speaker
a) Letter from the Minister of Transport dated 22 October 2009, to the Speaker of the National Assembly explaining the delay in the submission of the Annual Reports of the Cross Border Road Transport Agency (C-BRTA) and the South African Maritime Safety Authority (SAMSA) for 2008-09.
Written explanation on the late submission and tabling of the Annual Reports and Annual Financial Statements for the year ended 31 March 2009 of the Department of Transport, the Cross Border Road Transport Agency(C-BRTA) and the South African Maritime Safety Authority (SAMSA) I write to inform Parliament that in terms of subsection 65 (1) (a) of the Public Finance Management Act, 1999 (Act No 1 of 1999), as amended (PFMA), I was unfortunately not able to table the Annual Reports and audited Financial Statements for the year ended 31 March 2009 of the Department of Transport, the Cross Border Road Transport Agency (C-BRTA) and the South African Maritime Safety Authority (SAMSA) before the deadline of 30 September 2009. Section 65 (2) (a) of the PFMA stipulates that if an Executive Authority fails to table, in accordance with subsection 65 (1) (a), the Annual Report and Annual Financial Statements of the Department or the Public Entity, and the Audit Report on those Statements, in Parliament within six months after the end of the financial year to which those Statements relate, i.e. 30 September 2009, the Executive Authority must table a written explanation in Parliament setting out the reasons why such an Annual Report was not tabled. The purpose of this communication is therefore to furnish Parliament with the following reasons for the late tabling of the following Annual Reports:- The Department of Transport The Department of Transport has gone through the required audit process with the Office of the Auditor-General and this afforded the Department with an opportunity to finalise its Annual Report on time. However, following the 2009 elections, there was a change in the Department, which affected both the Executive Authority and, ultimately, the Accounting Officer. As a consequence, the new administration required time to apply itself to the contents of the 2008/09 Annual Report, which was prepared by the erstwhile administration. This took place at a time when the Department was preparing the Annual Report for printing, which subsequently resulted in a delay in the printing of the Annual Report for tabling in Parliament by 30 September 2009. The Cross Border Road Transport Agency The Minister of Transport was not able to table the Annual Report and audited Financial Statements of the C-BRTA for the year ended 31 March 2009, before the deadline of 30 September 2009, as required in terms of section 65 (1) (a) of the Public Finance Management Act, 1999. The Agency could not submit the Annual Report to Parliament in time due to unforeseen internal and external administrative processes that contributed to the delay in getting the Annual Reports ready for submission to Parliament. The South African Maritime Safety Authority The Auditor-General (AG) completed its annual audit on time and the 2008/09 draft Annual Report was submitted to the SAMSA Board for consideration and approval before the AG’s timeline of 31 July 2009. It should be noted that SAMSA obtained an unqualified audit report for the 2008/09 financial year. However, the Board failed to convene and approve the 2008/09 Annual Report. The Chairperson of the Board signed the Accounting Authority’s report. The printed 2008/09 Annual Report was submitted to the Board for approval for submission to the Executive Authority before the PFMA deadline of 31 August 2009, but the Board again did not approve the Annual Report. Finally at SAMSA’s Annual General Meeting (AGM) on 11 September 2009 a copy of the 2008/09 Annual Report was tabled, but the Board did not approve the Annual Report. The Shareholder is currently intervening to convene a further meeting wherein the Board could consider the approval of the 2008/09 Annual Report. The delay in submitting the above-mentioned Annual Reports is regretted and every effort is currently being made to ensure that the Reports are submitted to Parliament as soon as possible. I trust that this will be in order. Kind regards signed Mr J S NDEBELE, MP MINISTER OF TRANSPORT
COMMITTEE REPORTS
National Assembly
- Second Report of the Standing Committee on Public Accounts on the Report of the Auditor General on Performance Audit of Entities that are connected with Government and doing business with National and Provincial Departments, dated 20 October 2009
Background
The Auditor General (AG) issued a report to Parliament in January 2006 which indicated that designated employees (senior managers) and certain ministers failed to declare their interests and that the majority of government employees did not have approval to perform remunerative work outside their employment in government, as prescribed by the relevant legislation and regulations.
Based on the above, a transversal performance audit was conducted on government employee-related entities doing business with national and provincial departments. A report on the audit was tabled in Parliament in August 2008.
Report of the Committee The Standing Committee on Public Accounts (SCOPA) heard and considered evidence from the Director Generals and Heads of Departments of the following Departments & Entities: • National Treasury • Department of Public Service and Administration (DPSA) • Public Service Commission (PSC) • Office of Premiers from all nine Provinces • Higher Education • Labour • Agriculture • Correctional Services • Arts and Culture • Communications • Trade and Industry • Water and Environment
- Approval to perform remunerative work
The Auditor General raised specific concerns on the above and reported as follows:
a) With respect to obtaining approval to perform remunerative work it was found that 2 319 government officials had an interest in companies/Closed Corporations (CCs) that did business with national and provincial government departments; b) Although some of the departments are still determining whether employees who are directors and/or members of companies and/or CCs that did business with departments had approval to do so, departments confirmed that only 75 officials (3%) had approval to perform remunerative work outside their official employment at the departments; and c) The business conducted with government by these employee-related entities for the 2005-2007 financial years amounted to R615 million.
The Committee recommends that:
i) National departments who had employees performing remunerative work without approval, investigate these instances and that the relevant Accounting Officers take immediate and appropriate disciplinary actions against those who are found guilty of performing remunerative work without approval; ii) Provincial Public Accounts Committees consider holding public hearings with respective provincial departments to determine the actions to be taken against implicated employees by respective employers; iii) Provincial heads of departments take immediate remedial actions to ensure compliance with legislation by all employees; iv) National and provincial departments should implement and actively monitor the systems of control to manage the performance of other remunerative work by employees. This could include the annual issuing of letters to employees, informing them of the requirement to obtain approval to perform other remunerative work. Copies of the letters of approval should either be kept centrally or placed on the employees’ files; v) The legal interpretation regarding what constitutes remunerative work be speedily concluded by the relevant bodies i.e. PSC and DPSA and be communicated widely to the public service so that consistent standards of prohibition can be applied to all public service entities; vi) PSC and DPSA expedite efforts to amend current legislation that employees of the state may not be granted permission to perform any remunerative work, or to engage in any activity for gain, if such work or activity is in any manner connected to a business or industry that had contracted with or submitted a tender to the State to render a service or to supply a product to the service; and vii) In the event that some employees be found guilty, the respective national and provincial accounting officers must ensure that they recover the money acquired through these fraudulent means in line with the provisions of the Public Service Act.
- Declaration of interest by designated employees
The Auditor General raised the following concerns: a) Of the 30 employees who were directors or members of companies or CCs that did business with the department where they were employed, five were designated employees, of these 5 employees, one had not submitted a financial disclosure form to the PSC, three had not declared their interest in the company or CC on the financial disclosure form and one incorrectly indicated on the financial disclosure form that he had resigned from the Closed Corporation. b) The total amount paid in this regard during the period under review was R 30 664 013.
The Committee recommends that: i) The Accounting Officers of the relevant departments must take disciplinary action against designated employees who did not declare their interest in companies or CCs that did business with state departments; and ii) The Department of Public Service and Administration should consider the possibility of a similar disclosure form to be completed by non- designated employees.
- Declaration of interest in standard bidding documents
The Auditor General raised a concern that tenderers made misrepresentations by not declaring in the tender documentation that employees are related to the companies and Closed Corporations that are tendering.
The Committee recommends that:
i) National Treasury should extend the declaration of interests on the Standard Bidding Document 4 form (SBD 4) form to include all relationship with the state, similar to the requirements of the previous ST 12 form; ii) All employees who failed to declare interest in the bidding documents according to the provisions of the law must be penalised accordingly; iii) The declaration by the employees’ spouses and other close relatives which include close family members should be made compulsory if the bidding company or CC in which they have an interest in submits a tender; iv) National Treasury should facilitate the enactment of provisions related to declaration of interest to include all relationships with the State. The declaration form should also indicate the position occupied by the shareholder / director / member of a CC or company; v) Spouses’ directorship / membership / shareholding in companies that had transacted with the State in the 12 months of the previous financial year, should be declared; and vi) The Public Service Commission, CIPRO and National Treasury Defaulters Databases should be integrated for availability of information.
- Conflict of interest with regard to supply chain management
The Auditor General raised the following concerns: a) Deviations from submission of the correct number of written quotations were found in seven cases; b) Failures to accept lowest quotations were found in three cases; c) Division of tenders into separate parts to avoid compliance with prescribed thresholds were found in five cases; d) Failures to apply the 80/20 points system were found in two cases; e) Conflicts of interest concerning employees or their spouses with regard to specific contracts awarded were found in the following Departments: Agriculture, Arts and Culture, Communications, Correctional Services, Education, Labour, Trade and Industry and Water Affairs and Forestry.
The Committee recommends that: i) Departments must strengthen measures to ensure compliance with Supply Chain Management legislation; ii) When departments prepare lists of prospective suppliers they must require companies and CCs to disclose whether any of their directors, shareholders or members are employed in government, including the spouses and close relatives of employees; iii) Departments listed in the AG’s report must investigate the possibility of preferential treatment or fraudulent action in the allocation of these tenders and action be taken. iv) All employees (designated or non-designated) who are in a position to influence the process whereby contracts or tenders are awarded must disclose details of their and their spouses directorships/CC memberships.
- Non-compliance with certain Treasury Regulations and Value Added Tax legislation
The Auditor General raised the following concerns: a) That although the National Treasury’s code of conduct must be adhered to, there is no legal requirement for employees working as supply chain management officials to sign a code of conduct. Departments generally did not have a signed code of conduct; and b) There were identified cases of companies and CCs that are registered for VAT that did not disclose that VAT amount and or VAT number, as well as companies or CCs who charged VAT although they are not registered for the VAT.
The Committee recommends that: i) All departments should ensure supply chain management employees sign a code of conduct committing themselves to fair and ethical procurement practices. Such a code must be effectively monitored; ii) All departments should ensure that invoices comply with the VAT Act before authorising payment; iii) Departments must not award contracts to companies who are not registered for VAT and in cases when such regularities occur, the Accounting Officials must take disciplinary actions against officials who presided over such awards; iv) All departments must ensure that they develop effective monitoring and evaluation policies that will respond to any breaches in policy and deal with such cases immediately; v) All departments should report non-compliance to SARS legislation by companies and CCs doing business with government.
-
Further Recommendations The Committee further recommends that the Accounting Officers of all the Departments that are mentioned in the report should submit a progress report on all the recommendations to the National Assembly within 60 days after the adoption of this report by the House. Report to be considered
TUESDAY, 27 OCTOBER 2009
ANNOUNCEMENTS
National Assembly and National Council of Provinces
The Speaker and the Chairperson
-
Membership of committees
1) The following members were appointed to the Joint Standing Committee on Intelligence on 22 October 2009 in terms of section 2 of the Intelligence Services Oversight Act, 1994 (Act No 40 of 1994):
Dlodlo, A (ANC) Montsitsi, S D (ANC) -
Introduction of Bills
1) The Minister of Finance
a) Adjustments Appropriation Bill [B 13 – 2009] (National Assembly – proposed sec 77). Introduction and referral to the Standing Committee on Appropriations of the National Assembly, as well as referral to the Joint Tagging Mechanism (JTM) for classification in terms of Joint Rule 160. In terms of Joint Rule 154 written views on the classification of the Bills may be submitted to the Joint Tagging Mechanism (JTM) within three parliamentary working days.
TABLINGS
National Assembly and National Council of Provinces
- The Minister of Finance
a) Medium Term Budget Policy Statement 2009 [RP 246-2009].
Referred to the Standing Committee on Finance for consideration and
report in terms of section 6(3) of the Money Bills Amendment
Procedure and Related Matters Act (Act No 9 of 2009) and to the
Standing Committee on Appropriations for consideration and report
in terms of section 6(8) of the Act, the committees to confer with
their counterparts in the National Council of Provinces when
necessary.
b) Adjustments Appropriation Bill, 2009 [B13-2009].
Referred to the Standing Committee on Appropriations for
consideration and report.
c) Adjusted Estimates of National Expenditure 2009 [RP 247-2009],
which includes:
1. Vote No 1 – “The Presidency” – Adjustments Estimates, 2009-2010;
2. Vote No 2 – “Parliament” – Adjustments Estimates, 2009-2010;
3. Vote No 3 – “International Relations and Cooperation” –
Adjustments Estimates, 2009-2010;
4. Vote No 4 – “Home Affairs” – Adjustments Estimates, 2009-2010;
5. Vote No 5 – “Public Works” – Adjustments Estimates, 2009-2010;
6. Vote No 6 – “Government Communications and Information System” –
Adjustments Estimates, 2009-2010;
7. Vote No 7 – “National Treasury” – Adjustments Estimates, 2009-
2010;
8. Vote No 8 – “Public Administration Leadership and Management
Academy” – Adjustments Estimates, 2009-2010;
9. Vote No 9 – “Public Service and Administration” – Adjustments
Estimates, 2009-2010;
10. Vote No 10 – “Public Service Commission” – Adjustments Estimates,
2009-2010;
11. Vote No 11 – “Statistics South Africa” – Adjustments Estimates,
2009-2010;
12. Vote No 12 – “Arts and Culture” – Adjustments Estimates, 2009-
2010;
13. Vote No 13 – “Education” – Adjustments Estimates, 2009-2010;
14. Vote No 14 – “Health” – Adjustments Estimates, 2009-2010;
15. Vote No 15 – “Labour” – Adjustments Estimates, 2009-2010;
16. Vote No 16 – “Social Development” – Adjustments Estimates, 2009-
2010;
17. Vote No 17 – “Sport and Recreation South Africa” – Adjustments
Estimates, 2009-2010;
18. Vote No 18 – “Correctional Services” – Adjustments Estimates,
2009-2010;
19. Vote No 19 – “Defence and Military Veterans” – Adjustments
Estimates, 2009-2010;
20. Vote No 20 – “Independent Complaints Directorate” – Adjustments
Estimates, 2009-2010;
21. Vote No 21 – “Justice and Constitutional Development” –
Adjustments Estimates, 2009-2010;
22. Vote No 22 – “Police” – Adjustments Estimates, 2009-2010;
23. Vote No 23 – “Agriculture” – Adjustments Estimates, 2009-2010;
24. Vote No 24 – “Communications” – Adjustments Estimates, 2009-2010;
25. Vote No 25 – “Environmental Affairs and Tourism” – Adjustments
Estimates, 2009-2010;
26. Vote No 26 – “Human Settlements” – Adjustments Estimates, 2009-
2010;
27. Vote No 27 – “Rural Development and Land Reform” – Adjustments
Estimates, 2009-2010;
28. Vote No 28 – “Minerals and Energy” – Adjustments Estimates, 2009-
2010;
29. Vote No 29 – “Cooperative Governance and Traditional Affairs” –
Adjustments Estimates, 2009-2010;
30. Vote No 30 – “Public Enterprises” – Adjustments Estimates, 2009-
2010;
31. Vote No 31 – “Science and Technology” – Adjustments Estimates,
2009-2010;
32. Vote No 32 – “Trade and Industry” – Adjustments Estimates, 2009-
2010;
33. Vote No 33 – “Transport” – Adjustments Estimates, 2009-2010;
34. Vote No 34 – “Water Affairs and Forestry” – Adjustments
Estimates, 2009-2010;
35. Vote No 35 – “Agriculture, Forestry and Fisheries” – Adjustments
Estimates, 2009-2010;
36. Vote No 43 – “Water Affairs” – Adjustments Estimates, 2009-2010.
Referred to the Standing Committee on Appropriations for
consideration and report.
- The Minister of Police (a) Report of the Independent Complaints Directorate (ICD) for July 2008 to December 2008, in terms of section 18(5)(c) of the Domestic Violence Act, 1998 (Act No 116 of 1998).
National Assembly
-
The Speaker
b) Letter from the Minister of Public Enterprises dated 23 October 2009, to the Speaker of the National Assembly explaining the further delay in the submission of the Annual Report of the Pebble Bed Modular Reactor (PBMR) for 2008-2009. Extension on the Submission of PBMR 2009 Annual Report
My letter dated 22 July 2009, has reference. I wish to advise that I have granted PBMR a further extension to delay the submission of the annual report from 31 October 2009 to 31 December 2009. The extension was given on the basis that a process is currently underway of reviewing the business model of PBMR. As a result, a further delay in the submission of PBMR’s annual report is anticipated. Accordingly, I have extended my permission to PBMR, in anticipation of this delay. I trust this is in order. Yours sincerely MS B HOGAN, MP MINISTER OF PUBLIC ENTERPRISES
COMMITTEE REPORTS
National Assembly
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Report of the Portfolio Committee on Communications on Appointment of Mr William Stucke to serve on the Independent Communications Authority of South Africa (ICASA) Council, dated 27 October 2009.
The Portfolio Committee on Communications, having considered the request from the Minister of Communications for appointment of Mr William Stucke to serve on the Independent Communications Authority of South Africa (ICASA) in terms of section 5(1B) of the Independent Communications Authority of South Africa Act (No13 of 2000), as amended (see ATC, 19 October 2009), recommends that the House approves the appointment of Mr William Stucke.
Report to be considered.