THURSDAY, 25 MARCH 2010 __

          PROCEEDINGS OF THE NATIONAL COUNCIL OF PROVINCES
                                ____

The Council met at the Sekhukhune Further Education and Training College, Dr CN Phatudi Campus in the Greater Tubatse Local Municipality at 17:11.

The Chairperson took the Chair and requested members to observe a moment of silence for prayers or meditation.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS – see column 000

           AMENDMENT OF ORDER PAPER TO INCLUDE ORDER NO 6

                         (Draft Resolution)

The CHIEF WHIP OF THE NCOP: Chair, I move without notice:

That the Council agrees that the Order Paper be amended to include Order No 6, namely the Consideration of Report of Select Committee on Security and Constitutional Development – Regulations made in terms of section 97(1) of the Child Justice Act, 2008(Act No 75 of 2008).

Question put: That the motion be agreed to.

IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.

Motion accordingly agreed to in accordance with section 65 of the Constitution.

                      SUSPENSION OF RULE 239(1)

                         (Draft Resolution)

The CHIEF WHIP OF THE COUNCIL: Chair, I move without notice –

 That Rule 239(1), which provides inter alia that the consideration of a
 Bill may not commence before at least three working days have elapsed
 since the committee’s report was tabled, be suspended for the purposes
 of consideration of the Division of Revenue Bill [B4-2010] (National
 Assembly – sec 76(1)).

Question put: That the motion be agreed to.

IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.

Motion accordingly agreed to in accordance with section 65 of the Constitution.

            WISHES FOR A SPEEDY RECOVERY FOR MR A WATSON

The CHAIRPERSON OF THE NCOP: Before the Secretary reads the First Order of the day, I take this opportunity, on behalf of the House, to wish one of our hon members, Mr Watty Watson, a speedy recovery and good health. As you are aware, he was in hospital. I’m sure he is back home now. However, he is not yet well and we wish him a speedy recovery on behalf of the Council.

                      DIVISION OF REVENUE BILL

            (Consideration of Bill and of Report thereon)

The DEPUTY MINISTER OF FINANCE: Chairperson of the National Council of Provinces, Ministers present here, premiers present, the Premier of Limpopo in absentia, MECs, permanent and special delegates, traditional leaders, ladies and gentlemen, I greet you.

This month, which celebrates human rights, is indeed an important milestone in our country, as it not only marks the 50th anniversary of the Sharpeville and Langa massacres as the most important events of the liberation struggle but also acknowledges the progress we have made to restore the dignity and rights of all South Africans. I want to take this opportunity to commend the National Council of Provinces, NCOP, for having taken a decision at this time, during this month, to bring the people’s Parliament to where it belongs, to the people.

The national orders, the highest awards that our country bestows on its citizens and foreign nationals who have contributed to our nation’s attainment of democracy, as well as building democracy and human rights, were awarded to three distinguished Limpopo veterans and stalwarts who distinguished themselves in the struggle for justice, democracy, human rights and development. These recipients include Mr Tlou Theophilus Cholo, an activist and public representative in his own right, Mr Rashaka Frank Ratshitanga, and Ms Lydia Komape-Ngwenya, a former Member of Parliament, and many others. It is through their sacrifices and endeavours that today we can talk about the freedom and the democracy that we share.

Again I commend the NCOP for having brought this programme at this time and having chosen Limpopo because of the contribution made by these stalwarts and many others whom we all know. It was also in this province that the ANC’s 52nd conference was held and ground-breaking resolutions were passed to accelerate service delivery and to further democratise the state in pursuit of the noble objective of a better life for all. We reaffirmed our commitment towards a developmental state that is responsive to the people’s needs and allocates resources to fight poverty, inequality and social deprivation. As our first democratically elected President, Tata Nelson Mandela, put it in his address to the US Congress on 26 June 1990:

We must also make the point, very firmly, that the political settlement, and democracy itself, cannot survive unless the material needs of the people, the bread-and-butter issues, are addressed as part of the process of change and as a matter of urgency. It should never be that the anger of the poor should be the finger of accusation pointed at all of us because we failed to respond to the cries of the people for food, for shelter, for the dignity of the individual.

These important events are very appropriate for the 2010 Division of Revenue Bill that the NCOP is considering today, as the allocations contained in this Bill are intended to restore the dignity and rights of all South Africans by catering for services such as education, primary health, housing, water and sanitation, and electricity. It really makes it important that our oversight bodies, such as this Council, the legislatures and the National Assembly, use this legislation and all other information that National Treasury generates to ensure that the goals that many of our people in the country fought for during the liberation struggle, including the stalwarts from Limpopo, as I have identified, are realised.

In terms of section 214 of the Constitution, government needs to ensure a transparent and equitable system to divide nationally raised revenue between the three spheres of government. The Division of Revenue Bill that is before us today and its underlying allocations are the culmination of extensive consultation processes between national, provincial and local governments. Of the R112,2 billion additional resources available for spending over the next three years, national departments will receive R56,2 billion, which is about 50,1%. Provinces will receive an additional R45,6 billion, which is 40,6%, and municipalities will receive R10,4 billion, which is 9,3%.

The Division of Revenue Bill that was tabled in the National Assembly by the Minister of Finance on Budget Day was, as we all would recall, for the first time processed in terms of the Money Bills Amendment Procedure and Related Matters Act, Act 9 of 2009. A report was tabled with the Budget, explaining how the division of revenue and National Budget gave effect to the recommendations contained in the committee reports of the 2009 Medium- Term Budget Policy Statement. In that, we also indicated the reasons for taking this into account, as well as those recommendations that were not taken into account. So, I am happy to announce that the recommendations by the Select Committee on Appropriations were taken into account when we processed it, and responses were provided.

This Bill covers in detail all transfers to be made to provinces and municipalities over the next three years. The explanatory attachments also contain detailed information on the formulas for the provincial and local equitable share allocations and a detailed framework on each conditional grant to a province or municipality. However, allow me to caution that certainty of flows alone is not sufficient to ensure that services are delivered to our people.

In light of the need to speed up progress on South Africa’s developmental challenges, government is now shifting away from focusing on activities to targeted outcomes to improve service delivery and increase accountability. That will become the focus of policy and implementation. These objectives, with associated activities and defined targets to be reached by 2014, have helped shape the 2010 Budget. It is important that all national and provincial departments, as well as municipalities, cut nonessential expenditure from their budgets and prioritise activities that will lead to improved outcomes.

Chairperson, let me turn to some of the highlights of the deliberations in the Select Committee on Appropriations on this Bill that the House is considering today.

Some of the issues that were raised by those who made representations to the committee point to the following pertinent matters about our budgeting, financial management and performance monitoring system: Firstly, and most importantly, the deliberations highlighted the importance of the NCOP in exercising its oversight role.

Secondly, the discussions highlighted not only matters of capacity and quality of spending but also spending pressures faced by provinces and municipalities. I am told that members of the select committee raised concerns regarding the ability of certain provinces to deal with costs associated with the implementation of the occupation-specific dispensation for health and education. Concerns were also expressed regarding the funding of smaller municipalities that struggle to maintain institutional capacity for effective local governance and administration. The lack of sufficient road maintenance was also highlighted as a key area of concern.

Thirdly, the latest available data needs to be used to determine grant allocations to individual provinces and municipalities in order to ensure that service delivery responsibilities are appropriately matched with resources.

Lastly, discussions also focused on the effectiveness of conditional grants currently in place. The importance of ensuring that grants’ objectives are met prior to such grants being withdrawn or abolished, such as those that cater for water, sanitation and electricity facilities in schools and clinics, was stressed. The importance of transferring national offices communicating to receiving offices the qualifying criteria and grant conditions prior to the commencement of the financial year was also emphasised.

The committee supported the introduction of a number of new conditional grants to provinces and municipalities, such as the Rural Household Infrastructure Grant. These recommendations will be taken forward in subsequent budgets. The need to ensure an equitable division of the available resources to individual provinces and municipalities is one of the founding principles of our intergovernmental fiscal system.

The equitable share formula relating to provinces and municipalities therefore need to be appropriately structured. In other words, it should adhere to the principles of equity, efficiency, spill-over effects and facilitating democracy.

A review of the provincial equitable formula is under way that will, amongst other things, focus on education, health and social development, provincial infrastructure, which includes roads, economic services, governance and administration. The review should be completed in time to be adopted in the 2011 Division of Revenue Bill.

Similarly, a review of the local government fiscal framework and equitable share formula are under way in order to more appropriately deal with the different challenges faced by the 283 municipalities. Accordingly, historical backlog service delivery responsibilities and socioeconomic and demographic realities - a one-size-fits-all, therefore - does not recognise these differences and that is why we are looking at it.

The review, amongst others, also includes a review of all conditional grants to local governments and that is one of the recommendations that I indicated will be taken into account in the next financial year.

With regard to provinces, the increase of a baseline for the next three years to provinces is to sustain the social progress made in recent years to meet government’s broader developmental objectives and mitigate the effects of the current economic downturn on the poor. Of the additional allocation to provinces, R33,9 billion is added to the provincial equitable share and R11,7 billion to conditional grants. Including these revisions, allocations to provinces will now amount to R322,9 billion in the 2010-11 financial year.

These allocations are in line with government’s efforts to upgrade the quality of basic education, improve health outcomes and life expectancy at birth and develop sustainable rural communities and human settlements. An amount of R12,9 billion is intended to step up service delivery in health and education, and to implement the occupation-specific dispensation agreements in these sectors. Also, an additional R18 billion is intended for the carry-through costs of the 2009 public service salary agreements.

In support of government’s commitment to step up efforts to deal with HIV and Aids decisively, R8,7 billion is also added over the next three years to ensure sufficient resources are available for government to deliver on its commitment announced on World Aids Day.

Turning to local government, over the next three years municipalities will receive R210,4 billion, including in-kind allocations and the sharing of the general fuel levy with metros, or an additional R12,2 billion. These additional allocations build on previous spending programmes and are directed to the local government priorities, namely the local government equitable share, which receives a further R6,7 billion to protect the poor from increased electricity prices and secure the delivery of free basic services to poor households.

Municipal infrastructure-related spending is allocated an additional R2,5 billion over the next three years. A process is under way to accredit large municipalities to administer national housing programmes. This policy shift should improve co-ordination and alignment of interventions in the built environment. Reforms are also under way to introduce programmes targeted at rural areas. Over the Medium-Term Expenditure Framework R1,2 billion is made available to cater for the roll-out of on-site water and sanitation services to very poor households where conventional connector services are not viable or appropriate.

In conclusion, Mr Chairperson, I would like to thank the hon Chairperson of the Standing Committee on Appropriations, Mr T Chaane, for his leadership and the members of the standing committee alike for their hard work in the processing of this Division of Revenue Bill.

Chairperson and members, it is clear that the allocations contained in this year’s Division of Revenue Bill should put government in a better position to accelerate delivery and improve the efficacy of public services. Thank you very much. [Applause.]

The CHAIRPERSON OF THE NCOP: Order! Just before I call on Mr Chaane, I would like to correct the mistake I made this afternoon when we closed the public hearing. Our sitting tomorrow starts at 09:00. Everybody must be seated by 08:30.

Ke kgopela setšhaba seo se lego gona mo, le no botšana kamoka gore re tla thoma ka 09:00 bosasa. Ka 08:30 re swanetše goba re dutše ka mo. Motlatša Mopresidente o tla thoma go bolela ka 9;00. Re tla goeletša le mo radiong mathapameng a lehono gore bao ba šetšego ba sepetše ba kgone go kwa. Ke a leboga. [Legofsi.] (Translation of Sepedi paragraph follows.)

[Please tell those who are not present that tomorrow we will start at 09:00. Everyone must be seated at 08:30. The Deputy President will start his speech at 09:00. We will also announce it on the radio this evening for the message to reach those who are already gone. Thank you. [Applause.]]

Mr T E CHAANE: Chairperson, hon Deputy Minister, hon premiers, hon members, ladies and gentlemen. On 17 February 2010 the Minister of Finance, hon Pravin Gordhan, tabled the Division of Revenue Bill together with the Budget. This was in accordance with the relevant sections of the Money Bills Amendment Procedure and Related Matters Act of 2009, the Constitution and the Intergovernmental Fiscal Relations Act of 1997.

Following the tabling of the Division of Revenue and the engagements with the national Department of Treasury, the Select Committee on Appropriations, in accordance with section 4 of the Money Bills Amendment Procedure and Related Matters Act of 2009, held public hearings on 5 March 2010.

The committee received written and oral submissions from the Department of Higher Education, Department of Basic Education, Department of Energy, Department of Health, Department of Rural Development, SA Local Government Association, Salga, Financial and Fiscal Commission, FFC, Aids Law Project, Eskom, SA Institute of Chartered Accountants, the City of Cape Town and inputs from all nine provinces.

Therefore, it follows that today marks an end to the final leg of the very involved budget process of consultation on the Division of Revenue Bill as presented by the Minister of Finance. Today’s debate will therefore further clear the way for the release and transfer of the equitable share of revenue to all three spheres of government from the beginning of April this year.

Government resolved many years ago to create a better life for all and to roll back the frontiers of poverty. Through experience and rich history of consulting the people, the ANC-led government resolved further that much more can be done to serve the needs and interests of the people with the limited and scarce resources available.

The strategy of maintaining focus on key priorities by involving every citizen was employed and popularised through the coming into being of the ANC’s slogan of “Together we can do more.” Indeed, if we all work together, irrespective of our party-political affiliations, doing things faster, better and differently, we can achieve more, as the President said during his state of the nation address.

The President declared this year a year of action. This is a call that we should all embrace if we are serious about improving the lives of our people. One is happy that the Minister of Finance has taken such bold action by tabling a Division of Revenue Bill that presents the outlook for a fragile economic recovery and discusses government’s medium-term spending priorities.

Therefore, it is upon the recipients of the allocations to take further action in implementing policy priorities and deliver quality services to our people. We expect to see less talk and more action.

It is my view, as said by the members of the Select Committee on Appropriations, supported further by the views of different organisations, departments, persons who made submissions and political parties, that indeed the Division of Revenue Bill has achieved its objectives amidst trying economic turbulence brought about by the dark cloud of recession hanging over the entire world.

This Bill takes into account the national interests of the ruling party to allocate government resources in a manner that will benefit the nation as a whole. It fairly covers the priorities of the ANC as set out in its 2009 election manifesto and reflected in the 2010 state of the nation address.

The Bill takes explicit account of the cost pressures relating to the occupation-specific dispensation agreement in the health and education sectors, policies on HIV/Aids treatment, provision of housing, roads, electricity, water and municipal infrastructure.

The commitment to provide free basic services to the poor is further reinforced by this Bill through a substantial increase in the local government equitable share as well as the introduction of new and different types of grants. This increase will help municipalities to deal with the increased cost pressures of providing free basic services due to increased electricity charges as well as to expand such services to the poor people.

Over and above the increase in the local equitable share it will, over the next three years, benefit substantially from the new rural infrastructure grant that has been introduced to roll out on-site water and sanitation services to poor households, an increase in indirect and direct transfers for the municipal infrastructure grant as well as an increase in the Regional Bulk Infrastructure Grant to ensure that bulk water projects are accelerated to provide bulk water to households in a more sustainable manner as well as drought relief.

Throughout these schemes job opportunities will be created and more of our youth will be employed. It is encouraging to note that all these issues and programmes benefiting from the Division of Revenue are underpinned by the policies of the ANC.

To compensate for low revenue income at rural municipalities, provinces received a fair share of the nationally raised revenue as well as direct and indirect grants to ensure better service conditions for the teachers, doctors and therapists so as to retain skilled and experienced practitioners in these sectors. This includes new grants aimed at subsidising nongovernmental organisations, NGOs, dealing with home-based care programmes, technical secondary school recapitalisation grants to modernise technical schools and the Dinaledi Schools Grant to provide support to these schools so as to enhance the quality of mathematics and science in Grade 12.

As I have already mentioned, the Bill meets the requirements of the law and, under the current economic conditions, this much, with little and limited resources, can be done. We expect much more improvement in the coming years and surely the establishment of the Parliamentary Budget Office will go a long way to strengthen our future work as parliamentary committees.

I am satisfied that with the ongoing engagements between National Treasury, the FFC and all relevant stakeholders issues identified during the consultation processes will be seriously considered and addressed to the satisfaction of all involved. The department should seriously consider recommendations as contained in our report. As we move towards the release of the funds to different spheres of government and, therefore, departments and Parliament, important questions need to be raised. Such questions are: Are all institutions eligible to receive these funds and ready to use them for the purpose intended for? Do they have plans and systems in place to achieve this? The answer could be a quick yes, yet, at a closer look, one might find a different story.

Allow me to remind this House of some of the scandalous things that are in sharp contrast with the above answer. Last week, just three days before Human Rights Day - a day on which we also commemorate the unprovoked brutal killings of our struggle martyrs in Sharpeville in 1960 by the then apartheid police force - in the National Assembly, the head of this country, President Jacob Zuma, was attacked in Parliament by those who became so obsessed with hatred, driven by anger, bruised egos and crazy ambitions.

This small group, under the banner of a party called Cope, was on an attacking spree supported by minority parties whose commitment to the cause of a transformational agenda becomes more and more questionable. If you listen to the speeches of some of these leaders you would clearly hear people crying for the pre-1994 status quo.

Even more strange, laughable and ludicrous is their nerve to launch such an attack on the head of the country in Parliament on the pretext of exercising their constitutional rights. [Interjections.] [Time expired.]

The CHAIRPERSON OF THE NCOP: Hon member, your time has expired. You can finish up that sentence. Finish up your sentence. Your time for speaking is over. You may conclude. That’s what I’m saying.

Mr T E CHAANE: As we move for the endorsement of the Division of Revenue Bill we should also commit ourselves to play an oversight role and check how these funds are utilised and root out any mismanagement and expose those who are hell bent on hiding themselves behind their loud voices, shouting war on corruption and mismanagement when they themselves are corrupt and unmanageable. On that note I move for the adoption of the Bill without amendments. I thank you. [Applause.]

Mr S S MAZOSIWE: Chairperson, the Eastern Cape supports the Division of Revenue Bill without reservations. I want to say today that South Africa is one of the few countries that have systematically developed systems of dealing with the Budget process. It consults with people, stakeholders and Members of Parliament. The final product of the Budget is indeed a product of the people. Having said that, we are not saying there are no challenges. The challenges are huge and they will be with us for a long time because we come from an era that has been bedevilled by racism and everything that goes with it.

The Eastern Cape supports this Bill, but notes the following: The debate takes place when economic crises continue to bare its ugly teeth at citizens of the world, including our country. South Africa has lost close to a million jobs during this crisis. Economists and analysts inform us that the beginning of the end of this crisis is upon us. This is indeed encouraging news. We welcome this because the economy of the country will improve as the crisis diminishes. We are pleased to note that government and the National Economic Development and Labour Council, Nedlac, have already developed strategies to curb joblessness, including making available funds to reskill our labour force.

Budgets have stabilised since 1994. I have mentioned before that there is certainty and stability through the Medium-Term Expenditure Framework, MTEF, process. Provinces and local governments are able to plan ahead on their programmes and projects. This is key to the achievement of service delivery in our country. The Eastern Cape is also encouraged that the Financial and Fiscal Commission, FFC, in our discussions during the public hearings, has acknowledged and brought back the whole issue of the costed norms approach in funding provinces. This, we believe, will go a long way in addressing the real cost or realistic cost of projects or programmes.

Today the Deputy Minister has also alluded to the whole review process of the funding criteria. This, I suppose, will also be accommodated during the hearings or the debates in arriving at the best funding criteria for the country. We are really pleased that there has been a rethink around funding formulas because the Eastern Cape is among the provinces that have suffered the most during apartheid in terms of backlog. The Committee on Appropriations has undertaken to discuss with Eskom the regional electrification programme which affects our province negatively, particularly the Alfred Nzo district in the Eastern Cape. The electrification programmes in that part of the country are slow or nonexistent because of the funding model Eskom is using.

Overall, the Eastern Cape believes that the 2010-11 Division of Revenue brings hope to the electorate. It will be able to deliver some key government priority areas, namely the alleviation of unemployment through the public works programme, providing a better health care system, delivering an improved education system and drastically reducing crime and corruption through an improved and professional criminal justice system. Chairperson, with those few words, I thank you. The Eastern Cape supports the Bill. [Applause.]

Mr R A LEES: Hon Chair, hon Deputy Minister and hon members, there is no doubt that given the constraints placed upon him by the policies of the ANC and its alliance partners, the Minister of Finance has produced the best possible allocation of funds that he could. However, it is unfortunate that the allocations continue the long-standing trend of establishing a social welfare system at the expense of economic development. Economic development is the only way of achieving long-term poverty elimination and the reduction of income inequality. In his article in Focus recently, Prof Fedderke of University of Cape Town, UCT, argues that the stringent fiscal and monetary policy adopted by previous administrations has made funding available, which has been used for the development of the social security system and not for the development purposes of the economy. Thus, there has been reduced spending on key factors such as education, health and housing. The consequences for the country will be devastating as we fall further and further behind our global partners in terms of the availability of a high-quality workforce.

Another consequence of this skewed funding allocation towards welfare will be the inability to increase funding for health, policing and housing. There will be a reduction of funds available for these functions and the high expectations of the poor created by the ANC promises and endless plans without action will inevitably lead to more and more discontent and protest action.

Many in this House would have heard admissions and threats by people making submissions at this week’s public hearings - that unless the government delivers on its promises of jobs and service delivery, they will continue to steal or will embark upon theft. What has our society come to when people can publicly, in the presence of Members of Parliament as well as senior members of the police, admit to being thieves or disclose their intention to engage in theft? Is this desperation or is it simply frustration at the lack of delivery on promises made for the past 16 years? I think it is the latter, because to suggest that poor people are thieves is an insult to the millions of poor people who do not resort to crime nor even contemplate doing so.

The local government sphere is allocated the smallest share of revenue. This is contrary to the view of the DA, which holds that as much authority and accountability as possible must be devolved to the sphere of government closest to the people. Local government is the sphere of government tasked directly with the provision of services, which, with some notable exceptions, has failed to meet the expectations of the people and, yet, they get the smallest allocation.

There is the vexed question of conditional grants, whereby the national government dictates to other spheres of government how funds should be spent. The ANC may argue that the municipal sphere of government in particular is beset with poor governance as well as a critical skills shortage. The way to deal with this problem is certainly not the centralisation of power, as is currently happening. The simple and obvious solution is to rapidly reverse the ANC policy of cadre deployment. Only persons of ability and who owe no debt of gratitude for their appointments to the ANC should be appointed as officials.

Despite the urgent need to address the issue of redistribution of land without negatively impacting upon food production, a mere R1,9 billion has been allocated to the Department of Rural Development and Land Reform as compared to the R6,2 billion requested by the department. The question of land reform cannot continuously, Budget after Budget, be effectively put on hold by way of relatively small allocations of funds. There is an urgent need for the remaining and vast rural land claims to be resolved and for both the claimants as well as landowners to be given closure on this process which has dragged on for the past 15 years. Unless funding for settling claims is increased dramatically, there is a distinct possibility that frustrations experienced by both claimants and landowners will increase levels of violence and attacks on farmers and, inevitably, will lead to a lack of food security, as has been the case in Zimbabwe.

Hon Deputy Minister, it is great to hear you say that there should be cuts in nonessential expenditure. May I suggest to you, sir, that your Cabinet colleagues look at a few areas where they could cut nonessential expenditure such as ministerial cars, the presidential jets and high ministerial hotel bills. Perhaps that’s where we should start.

In conclusion, I raise the thorny issue of the use of police cars and personnel to escort members of the NCOP over the past few days. Not only do these vehicles and personnel carry out escort functions but they do so with blue lights flashing and sirens blaring. This bullyboy behaviour cannot be justified in our new democratic society. This is the kind of behaviour which one expects of failed states such as Zimbabwe, but certainly not in our new and successful South Africa. [Time expired.]

The CHAIRPERSON OF THE NCOP: Your time is over, hon member. Just finish off.

Mr R A LEES: The ANC needs to follow the lead of the DA government in the Western Cape and ban the use of police escorts and flashing blue lights in anything but an emergency situation. Thank you. [Applause.]

Ms B P MABE: Hon Chairperson of the NCOP, hon Deputy Minister, hon members, mayors, councillors, distinguished members who have filled this venue, the North West Province supports the Bill. It is an honour to be offered this opportunity to participate in the debate on the first Division of Revenue Bill of this administration.

When we as public representatives debate the manner in which the nationally collected revenue or cake is divided, we do so in order to make sure that the competing national, provincial and local needs are addressed in a manner in which revenue will be shared equitably. We fully understand that all the needs cannot be catered for at the same time, but consideration needs to be taken of the pressing challenges and needs facing the provincial and local government spheres.

Particular attention needs to be taken to cater for areas that do not have huge capacity to raise their own revenue. Rural provinces and rural municipalities are always negatively impacted upon by the final sharing of the cake or allocation of the national Budget.

One of the priorities of this government is rural development. It needs to be undertaken with the seriousness it deserves. It becomes a challenge when the two spheres of government in rural provinces have to address the challenges faced by the communities with the limited resources they have available at their disposal. It must be kept in mind that the rural provinces and municipalities are always at a disadvantage when it comes to their own revenue-generation capacity.

This division of revenue is debated at a time when national government cannot collect enough revenue due to the recession.

Ka jalo, kwelo tlase ya ikonomi e dira kgatelelo mo pusong ya rona mme go botlhokwa gore le fa maemo a ntse jalo, puso ya bogareng e tshwanetse e netefatse gore porofense le dinaga magae di kgone go bona madi a a ka di thusang go tsweletsa ditirelo pele. (Translation of Setswana paragraph follows.)

[As a consequence, the recession puts pressure on the government. Nevertheless, it is important that the national government must ensure that funds are allocated to both the provinces and the rural areas to ensure service delivery.]

I would like to remind this august House that redemarcation of the provinces impacts negatively on the donating and receiving provinces. The North West province, in this instance, is always negatively impacted upon by this process during every election period. In 2006, the reincorporation of Mabopane, Ga-Rankuwa and Hammanskraal into Gauteng province impacted negatively upon the province in various ways. With the recent reincorporation of Merafong into Gauteng, the North West province has once more been negatively impacted upon. The province always loses high-density areas to other provinces, a factor that dramatically reduces its population. It must also be considered that, although the province has many mines, poverty still continues to increase in the province.

I would like to outline how the reincorporation of Merafong into Gauteng has impacted negatively upon the equitable share allocation to the province. The province submitted budget proposals to National Treasury as expected. These figures were based on the services rendered to the Merafong community. These included the figures of personnel and the statistics of communities that were serviced in that area. National Treasury did not take these proposals or the structural reviews in the final allocation into consideration, as reflected in the Division of Revenue Bill. National Treasury top-sliced from the North West allocation without any consideration for the issues raised above.

Provision for health is one of the priorities of this government and the reduction of its allocation will impact negatively on the delivery of health services in the province.

Ke rata go gopotsa maloko a Ntlo e gore Porofense ya Bokone Bophirima e kaiwa jaaka nngwe ya diporofense tse di sa beeng madi a a bonalang a a lebaneng le tsa boitekanelo. Ga go a nna jalo, lebaka ke gore gangwe le gape fa melelwane e segiwa sešwa, madi a a neng a ka tsweletsa boitekanelo mo matshelong a batho ba rona a feletsa a ngotlega. (Translation of Setswana paragraph follows.)

[I would like to remind members of this House that the North West province is regarded as a province that does not give enough budgetary consideration to health. That is not true; the reason is the new demarcations that happen now and then, which cause financial strain in the health budget meant for our people.]

This situation has worsened with the top-slicing from the provincial equitable share and it will be very difficult for the province to recover from such a negative impact. With little resources available to the province, the delivery of this priority will be compromised to a certain extent. The provincial budget proposals were based on the available statistics which were not considered.

Fa ke lebelela thuto, le yona e tlile go amega ka ntlha ya phokotso ya madi a a neng a tshwanetswe a abelwe porofense ya rona. [In my view, education will be adversely affected due to the decrease in budget that was supposed to be allocated for our province.]

The same approach was followed when dealing with health and the challenge we face is how to make up for the money that we budgeted for the provision of services to our people as a provincial government without the funds that have been unjustly cut from the final allocation to the province.

Tota go tlile go nna boima gore re kgone go fitlhelela batho botlhe ba porofense go ka tlisa ditirelo tse di maleba segolo jang mo thutong le mo boitekanelong fa Matlotlo a Bosetšhaba a sa re thuse ka matlole a mangwe go fitlhelela maikaelelo a rona. (Translation of Setswana paragraph follows.)

[It is truly difficult for us to be able to render services to all the people of our province particularly in the education and health sectors, especially when the National Treasury does not help us with funds.]

A poor and rural province like the North West province with a low revenue base cannot provide improved service delivery without the R889 345 million that has unjustly been transferred to Gauteng as a result of the redemarcation process. We can do more with this money if it is redirected to the province. If not, National Treasury must provide additional funding that can assist us through this financial year to enable us to cope with the delivery of services.

We strongly believe that with the powers vested in Parliament, as outlined in Money Bills Amendment Procedure and Related Matters Act of 2009, our predicament as a province can be addressed for this financial year. Let us remember that this amount of R889 million can do a lot regarding the delivery of services to the people of the North West province.

Jaaka baagi le puso ya Bokone Bophirima re na le tsholofelo ya gore puo e re e tlhagisang mo kopanong eno e tla utlwiwa le go arabiwa ka mokgwa o o tla tlisang tsholofelo e ntsi go batho ba rona. (Translation of Setswana paragraph follows.)

[We, the people and the government of the North West province, have hope that the views expressed by us in this gathering will be heard and be responded to in a manner that will restore the confidence of our people.]

We are going to improve on the spending of conditional grants during this financial year. We also started putting measures in place to assist municipalities to spend conditional grants. We believe that this effort will go a long way in improving spending of conditional grants.

We have also, as a province, endeavoured to do more with the limited resources available at our disposal. To stabilise the utilisation of funds and improved delivery of services in our municipality, we have invoked section 139 of the Constitution in four municipalities, namely Madibeng Local Municipality, Moses Kotane Local Municipality, Tswaing Local Municipality and Ngaka Modiri Molema District Municipality.

This action was intended to improve the delivery of services to our people and also to spend funds effectively because of challenges that these people were faced with.

The CHAIRPERSON OF THE NCOP: Hon member, your time has expired.

Mme B P MABE: Ke a leboga Modulasetilo le setšhaba sotlhe se se fa, se se tlileng kopanong ya letsatsi la gompieno. Porofense ya Bokone Bophirima e dumelana le tokomane e e beilweng e ya Molaotlhomo wa go arolwa ga Matlole. Ke a leboga. [Legofi.] [Nako e fedile.] (Translation of Setswana paragraph follows.)

[Ms B P MABE: I thank the Chairperson and the people who are part of this gathering today. The North West province adopts the Division of Revenue Bill. I thank you. [Applause.] [Time expired.]]

The CHAIRPERSON OF THE NCOP: Let us make things easy as we do not have a watch. When I hit the table you must know that you have one minute left, and when I hit it for the second time, you must know that your time is over. It will be easier that way.

Mr S MAAKE (Limpopo): Hon Chairperson of the NCOP, hon members of the NCOP, …

… magoši, setšhaba ka kakaretšo, … [… chiefs, the House, …]

… it is indeed an honour for us to address this hon House. We address this House well aware of the task that has been squarely placed on our shoulders. We are addressing the House with appreciation and gratitude that you found it in you to visit our shores in line with the aspirations put eloquently during the fifties, namely that “The People Shall Govern”.

Ours, hon members, is to ensure that our people realise this necessity. By indicating that the people shall govern, it was definitely not envisaged that this particular power should only end up at the polls. It was also not envisaged that it should end at public hearings and podiums. It was meant that the power should be bestowed wholly on the populace of the Republic of South Africa, without taking into account colour, creed, gender, religious belief, etc. The question that we should be asking ourselves is: Who are these people referred to by the Freedom Charter? It is, therefore, submitted that these people are the most downtrodden the most exploited sections of our society – the poor.

It is, therefore, upon us to ensure that these sections of society, which are composed of workers and the peasantry, become the governing body politic. These sections should determine their future. They should have self-determination and determine the path of their future. It is against the above background that, as the people of Limpopo, we are taking part in the debate on the Division of Revenue Bill for the 2010-11 financial year. As Limpopo we support this Bill.

We are sure that by now, hon members, you have experienced the rural nature of our province. It is indeed in this province that we still experience subsistence farming in its classic form. It is in this province that we find the most poor. It is in this province that we experience lack of facilities for the advancement of the aspirations of the Freedom Charter.

Our people in this province are part of a large section of extremely exploited farm workers who, at times, are even denied the universal right of suffrage by the super profit-making farm houses of this province. It is indeed painful that, whilst producing good agricultural products, they cannot enjoy them lest they are murdered because they are mistaken for baboons that are illegally harvesting products that do not belong to them. The Freedom Charter calls upon us to ensure that the land must belong to those who work it.

As citizens of Limpopo we thought that it is important to indicate that this province is a product of wars of resistance that were waged against the apartheid regime. The descendants of the great warriors like Sekhukhune, Makgoba, Mantatisi, Makhado, Ngungunyane, Modjadji, etc, took it upon themselves to wage “guerrilla warfare” mass action, including the workers’ struggle, in continuance of the struggle for the total emancipation of the peoples of South Africa.

It is in this province that we share borders with Zimbabwe, Botswana, Mozambique and, therefore, it follows that instability in those areas will directly affect this particular area. It is against the above background that our people understand and appreciate the call by the Freedom Charter that there should be peace and friendship. Our people understand that they should appreciate and live side by side with foreign nationals.

Therefore, as a province, we would want to impress upon you, hon members, that as you divide the revenue of the country, it should be appreciated that this province is also home to a lot of foreign nationals that originate from as far afield as Indonesia. Therefore, this leads to budgetary constraints in all sectors of government.

Limpopo is one of those areas that experience an acute shortage of water. There is a slogan that says that water is life. It has been said time and time again that ordinarily in our province water is a scarce commodity. Let us ensure that we become innovative in this regard. Let us ensure that we harvest water. Let us ensure that not a single droplet is wasted. Let us ensure that we provide water for all.

Health and social development are key to a stable social order. It is, therefore, imperative that as representatives and messengers of the people we should at all times ensure that we strive to promote healthy social conditions and social living. Once more the government of the Republic has and continues to strive to ensure that the populace of South Africa shares in the Budget of the country.

We would like to indicate our gratitude to the President of the ANC and the President of the Republic of South Africa, Jacob Gedleyihlekisa Zuma, for presenting us with hope in the Division of Revenue Bill for the 2010-11 financial year. In the same vein, we will urge all departments in Limpopo to ensure that they spend their budget fully and wisely. The money as presented should be transparently spent; integrity should be the order of the day, and a process of spending coupled with accountability has to be followed to the letter. Having considered the inputs of the permanent delegates regarding this matter, we support the Bill accordingly. Thank you.

Mnr M J R DE VILLIERS: Agb Voorsitter van die Nasionale Raad van Provinsies, lede van die Raad, Ministers en Parlementslede van die provinsiale wetgewers en almal teenwoordig, vandag is ’n baie belangrike dag vir die werksaamhede en die uitvoering van die mandate van die regering verleen deur die Grondwet van Suid-Afrika. (Translation of Afrikaans paragraph follows.)

[Mr M J R DE VILLIERS: Hon Chairperson of the National Council of Provinces, members of the Council, Ministers and members of the provincial legislatures and everyone present, today is a very important day for the functions and the implementation of the mandates given to government by the Constitution of South Africa.]

The Division of Revenue Bill is the most important annual piece of legislation for any province. I want to mention the following documents. According to section 73 of the Money Bills Amendment Procedure and Related Matters Act of 2009, the money bills Act, section 10 of the Intergovernmental Fiscal Relations Act, Act 97 of 1997, and section 76(4) of the Constitution, the Minister of Finance must introduce the Division of Revenue Bill in Parliament. In accordance with these sections, the Minister of Finance, Mr Pravin Gordhan, tabled the 2010 Division of Revenue Bill before Parliament on 17 February 2010.

My province, the Western Cape, will receive 92% of its 2010 revenue in the transfers arising from this Bill. Most other provinces rely on the Bill for an even higher percentage of their income.

Sonder hierdie Wetsontwerp is die hande van provinsies afgekap, met ander woorde, geen dienslewering kan plaasvind nie.

Die manier waarop die land, Suid-Afrika, regeer word, word duidelik voorgeskryf deur die Grondwet van Suid-Afrika van 1995, naamlik ’n federale bestuur en die beheer van provinsies. Die nege provinsies is dus, naas die Nasionale Vergadering, die mees belangrike strukture in die uitvoering van wetgewende magte ten opsigte van die toewysing van geld aan plaaslike owerhede.

Die DA is dus ’n party wat op die beginsels van federalisme geskoei is en daarom waarborg ons dat die Grondwet van Suid-Afrika van 1995 te alle tye beskerm en verdedig sal word. (Translation of Afrikaans paragraphs follows.)

[Without this Bill the hands of the provinces would be tied; in other words, no service delivery would take place.

The way in which the country, South Africa is governed, is clearly prescribed by the Constitution of South Africa of 1995, namely federal governance and oversight of the provinces. Apart from the National Assembly, the nine provinces are the most important structures in the execution of legislative powers in respect of the allocation of funds to local authorities.

Therefore the DA is a party that is built on the principles of federalism and that is why we guarantee that the Constitution of South Africa of 1995 will be protected and defended at all times.]

The Western Cape welcomes the gradual trend of increasing fiscal federalism in our national Budget. Five years ago the national sphere of government spent more than half of the revenue raised. That is 50,3%, to be exact. By next year this will have dropped to 47%, meaning that provincial and local governments will together be spending the majority of national revenue. This shows that our tax money is moving closer to the people it needs to be spent on.

We are however concerned that an increasing proportion of the allocation to provinces is carved up into conditional grants. For 2010 almost one quarter of the money that my province received from the division of revenue comes in the form of conditional grants. This is an alarming trend. The more it continues, the more section 40 of the Constitution, which defines the provinces as distinct from the national sphere, is undermined.

We understand that certain provinces require a heavy hand from national government to prevent them from wasting money meant for service delivery, but we must be wary of limiting the freedom of those provinces that use their proximity to people to better target delivery.

The Western Cape welcomes the review of the fiscal transfer system that National Treasury has committed to complete in time for next year’s Budget process. We are told that the review will have a special focus on the economic activity component of the provincial equitable share.

This is a progressive approach that will hopefully result in money being spent in those areas that can ratchet up economic activity, thereby multiplying government spending.

We hope that the review will be in line with the recommendations by the Financial and Fiscal Commission in 2009 that the form of revenue sharing should replace the economic activity component of the formula.

Hierdie aanbeveling sal die DA ondersteun, nadat dit bekend geword het. Dit kan ons verseker. [The DA will support this recommendation once it becomes public. That we can assure you.]

The education component of the provincial equitable share is by far the biggest at 51%. This is appropriate, given the importance of education spending. Importantly, it is also driven by data that is relatively accurate and up to date.

Onderwys is die sektor wat die beste moontlikhede vir ons mense daar buite stel. [Education is the sector that offers the best possibilities for our people out there.]

We cannot say the same about other components that are based on population figures that are neither recent nor accurate. Provinces such as the Western Cape experience permanent immigration as a daily reality. An analysis of the increases in the provincial equitable share over the medium term shows that the Western Cape will receive higher increases in the percentage terms than other provinces, but it is unclear whether these increases are in line with population increase.

More alarmingly, anecdotal evidence suggests that short-term medical tourism is taking place. That is where citizens of other provinces travel to the Western Cape, specifically to use our medical facilities. They come from provinces which received funds for care that they don’t provide, while my province provides care that is unfunded.

Ons moet kyk om hierdie funksies, waarvoor daar nie `n mandaat is nie, te beheer, sodat die Wes-Kaap dit kan hanteer en ook die diens kan lewer aan die mense wat in die Wes-Kaap bly. [We will have to look at controlling this function, for which there is no mandate, in order for the Western Cape to deal with it and provide this service to people who are residing in the Western Cape as well.]

We have requested that Parliament be kept up to date on National Treasury’s review of the fiscal transfer system as it is completed. The Western Cape supports the Division of Revenue Bill … [Interjections.].

The CHAIRPERSON OF THE NCOP: You still have one minute left. The first hit means you have one minute.

Mr M J R DE VILLIERS: We have requested that Parliament be kept up to date on National Treasury’s review of the fiscal transfer system as it is completed this year. We hope that this review helps to secure a fairer share of revenue for the provinces against the circumstances of the provinces.

The Western Cape supports the Division of Revenue Bill on the condition that this review brings the provincial equitable allocation in line with immigration into the province. I thank you. [Applause.]

UMntwana M M ZULU: Mhlonishwa Sihlalo, iPhini likaSihlalo, iPhini likaNgqongqoshe walo Mnyango, oNdunankulu bazo zonke izifundazwe zethu zaseNingizimu Afrika, njengeqembu uma sibuka siyaweseka uMthethosivivinywa wokweHliswa kweziNtela njengabantu abakhe kuleli lizwe laseNingizimu Afrika.

Bese sibeka ukuthi kufanele kube namasu okubheka ukuthi izigebengu ezisebenza kulabo masipala, kohulumeni basekhaya, ikakhulukazi izimenenja nabaphathi bezimali ikhona yini indlela eyenziwayo ukuze bachaze ngokusetshenziswa kwezimali zomphakathi.

Njengeqembu futhi siyakweseka ukuthi uMnyango ophatha izimali, noMnyango Kahulumeni Wokubambisana kanye Nezindaba Zezendabuko, kufuneka ubhekelele kulezo zibonelelo eziya komasipala abampofu njengasekhaya eMelmoth, eNkandla nakuzo zonke ezinye izindawo lapho kunomasipala abancane futhi abampofu kakhulu. Kufuneka kube khona indlela yokubhekelela ukuthi kulezi zibonelelo abanikezwa zona ikhona yini enye indlela abasizakala ngayo, nokuthi bangenza kanjani ukuba bakwazi ukuthola imali, bakwazi ukuzimela ngoba ekugcineni kuyofuneka bazimele ukuze bakwazi ukuhlangabezana nezidingo zabantu.

Njengeqembu seseka izincomo zekomidi elincome ukuthi kufuneka kubekhona lokhu okuthiwa yisibonelelo sezingane ezisezincane, ukuze kukwazi ukuthi nezingane zethu ezisemabangeni emfundo eyisisekelo zikwazi ukubonelelwa emphakathini njengabantu abanelungelo lokuphila.

Mhlonishwa uma ningenazo izindlela zokubheka ukuthi sizintshontsha kanjani izimali zikahulumeni kuyobe kusetshenzelwa ize leze. UMnyango wakho noMnyango Kahulumeni Wokubambisana kanye Nezindaba Zezendabuko ezweni, kufuneka kube nezindlela enizibekayo ekubhekeni amafa omphakathi ukuthi laphaya ebantwini bakithi abampofu njengami bayakwazi ukusizakala. Ngibonga kakhulu. Iqembu lami liyaweseka uMthethosivivinywa wokweHliswa kweziNtela. [Ihlombe.] (Translation of isiZulu speech follows.)

[Prince M M M ZULU: Hon Chairperson, Deputy Chairperson, Deputy Minister of this department, premiers of all the provinces of South Africa, as a party and as citizens of South Africa we support the Division of Revenue Bill.

And we need to state that there should be strategies in place so that those criminals who work at these municipalities – local governments – especially the municipal managers and the chief financial officers, can account for the use of taxpayers’ money.

And as a party we also support the call that the Department of Finance and the Department of Co-operative Governance and Traditional Affairs must be considerate in terms of the subsidies that are allocated to poor municipalities like those in my hometown of Melmoth, or Nkandla and all the other places that have smaller municipalities that are also in great distress. There must also be other ways that will look into whether these subsidies can be beefed up in any way wether they can get other funds to enable these municipalities to stand on their own, because they must be able to stand on their own at the end for them to be able to meet the people’s needs.

As a party we support the committee’s recommendations in that there must be a government grant that supports young children. Our children who are still receiving basic education should receive assistance through government funds, because they also have the right to life.

Hon member, if you do not have ways of detecting how we misuse government funds, we are striving for nothing at all. Between your department and the Department of Co-operative Governance and Traditional Affairs, strategies must be put in place to see to it that public funds are accessible to our people who are poor like me. Thank you very much. My party supports the Division of Revenue Bill. [Applause.]]

Ms L HLONGWA (KwaZulu-Natal): Chairperson, Deputy Minister, hon members of the House, it is an honour for us to participate in such an important debate on the Division of Revenue Bill for 2010-11. The KwaZulu-Natal finance portfolio committee met on Thursday, 11 March, to consider and negotiate a mandate in respect of the Bill. The committee agreed to support the Bill without any amendments. This Bill was subsequently approved by the House on 23 March 2010. Chairperson, the Bill met all the requirements of the law and, therefore, all political parties felt it necessary to support it. We should thank the Deputy Minister who has today shared with us the good intentions by government to deliver services to our people amidst the recession. This confirms the commitment of the ANC to creating a caring society.

At the outset, we wish to express our appreciation for the introduction of the new grants, namely the Expanded Public Works Programme, EPWP, grant for the social sector, for which we are already developing a plan for it to be better utilised. The Technical Secondary Schools Recapitalisation Grant has brought relief to us as a province, as most of our technical schools were really not meeting the needs of technical schools. The further education and training, FET, function shift will help to alleviate the challenges faced by our FET colleges and also help us to stabilise the sector, which was somehow becoming a thorny issue in the Department of Education. Other grants include the water services operating subsidy, the municipal systems improvement grant and others.

Chairperson, the allocation to KwaZulu-Natal seems fair; we believe that we are allocated the largest share of all provinces. However, there is a need to mention the impact of unfunded national mandates that affect all provinces, inter alia the shortfall in allocation for the implementation of the occupation-specific dispensation, OSD, allowances made to all departments. This shortfall has a knock-on effect for future financial years.

The implementation of the OSD affecting various sectors also continues to exert pressure on the provincial fiscus, as these OSD packages are agreed to at the national level but are not always accurately costed when providing additional funding to the provinces. The shortfall in the higher- than-anticipated wage increase for public servants for the year 2009-10 also has a knock-on effect for future financial years.

We would like to highlight a few unfunded mandates particular to the province of KwaZulu-Natal: Firstly, there is the shortfall in the budget of the devolution of the property rates fund grant to provinces. This shortfall amounts to R221 million for the 2009-10 financial year, with a further projected shortfall of R321,5 million for the year 2010-11, bringing the cumulative shortfall to R542,5 million for the year 2010-11. This will increase substantially in the outer Medium-Term Expenditure Framework, MTEF, years.

Secondly, there is the unresolved dispute between the national and provincial Department of Public Works on the ownership of certain properties in the province for which rates must be paid. At present, the municipalities in which these disputed properties exist have to bear the cost of unpaid rates. The eThekwini Municipality has taken a decision to cut off electricity and running water to these government institutions.

Thirdly, we need to address the acknowledgement by the SA Social Security Agency, Sassa, of the debt owed to the provincial department of social development for the use of provincial facilities and resources for the current and past financial years but no commitment from the national Department of Social Development to pay these debts owed.

Another problem is the inability of the Department of Transport to meet its financial commitments to national road initiatives in KwaZulu-Natal, such as Sani Pass, the John Ross Highway in Richards Bay and the R102 upgrade for the new King Shaka Airport in eThekwini.

The new policy on incapacity leave, ill-health and retirement will cost a fortune in the province. This year it will cost about R28,7 million, R29,9 million in 2011-12 and R31,1 million in 2012-13. Though the province has sourced money to fund it, this initiative is totally an unfunded mandate and that is the opinion of the committee on finance.

Provincial Treasury requested a substantial amount of additional funding of R86,138 million, R92,657 million and R88,591 million for the municipal support programme for the year 2010-11. This is considered to be an unfunded mandate as the implementation of the Local Government: Municipal Finance Management Act in provinces has not been implemented with additional funds being provided by the National Treasury, but rather it is expected that provinces find the necessary funding for this mammoth task from within their provincial baselines. Some funding was allocated towards this but not nearly enough to cover the actual cost of implementation.

Education has requested additional funding of R338,409 million in this year, R494,666 million, and R591,399 million for the 2010-11 Medium-Term Expenditure Framework, MTEF, for the expansion of provincial examinations administrations, for which no additional funding was provided by the National Treasury.

The incorporation of Umzimkhulu into KwaZulu-Natal has brought about spending pressure in this Vote, since most of the schools in that area were mud schools, and we are still struggling as a department to eradicate that backlog. The province has costed this backlog at R44,1 billion if we are to deal with the infrastructure backlogs in all our schools in the province of KwaZulu-Natal.

Chairperson, the last point is that the Department of Public Works has requested substantial additional funding for R45,461 million, R47, 270 million and R49,566 million for the implementation of Gijima. The department also requested R2,328 million, R916 000 and R949 000 to enhance the functionality of the register to, amongst others, comply with the Gijima minimum requirements of a fixed assets register.

The impeding expenditure arises from the implementation of a new national Act, for which no additional funding was provided to provinces. Government departments have attended a workshop on this development, but there is little indication that they will be able to roll out this mandate in this current financial year.

The disaster management grant has been allocated R133 million for the year 2010-11. This amount will not cover the cost of emergency housing interventions, as in 2009-10, because we have already exhausted the allocation of R150 million and money still has to be paid, and we therefore need more money for disaster housing in KwaZulu-Natal.

The province of KwaZulu-Natal takes this opportunity to applaud the Division of Revenue Bill. As we have indicated before, it seeks to better the lives of our people, and it is certainly in line with the manifesto of the ANC. We extend our appreciation to Treasury for all the reviews that have to be done this year. The KwaZulu-Natal province applauds the select committee on the report tabled to us on 23 March 2010. We think that this is a step in the right direction, especially the recommendations in as far as the introduction of early childhood development grants and assistance to municipalities are concerned. As I alluded to earlier on, most of our municipalities in KwaZulu-Natal are in a bad state and need more money to service the people and also to build the capacity as suggested by the SA Local Government Association, Salga.

Chairperson, in closing, we are also delighted by the intention of Treasury to review the provincial equitable share, PES, formula as we think the province has fallen prey to this kind of a formula since KwaZulu-Natal has more than 8 million people. The KwaZulu-Natal province here commits itself to ensuring that monies appropriated for this year and allocations in the outer years are put to good use. With these words, Chairperson, we would like to thank you. We support the Bill. [Applause.]

Mr M W MAKHUBELA: Chairperson of the NCOP and your Deputy, Deputy Minister of Finance, hon MECs and members of the House, I salute you.

Tshivenḓa tshi ri ṅwana o thomaho u mela maṋo a nṱha, ndi shenga. Muvhuso wo vha wo fanela u zwi ḓivha zwauri musi Cope yo swika, ho bebwa ṅwana wa shenga ane ha nga vhuyi na ḓuvha na ḽithihi a humela murahu. Zwe ra zwi thoma ro zwi thoma nahone ri ḓo isa phanḓa. (Translation of Tshivenḓa paragraph follows.)

[In Tshivenḓa they say a child who cuts teeth on the upper jaw first is considered abnormal. The government should have known that the formation of Cope was like the birth of a child who cuts teeth on the upper jaw first - something unusual and there is no turning back. What we have started we started, and we will continue.]

The aim of the Division of Revenue Bill is to provide for the equitable division of revenue raised nationally among the national, provincial and local government spheres of government for the 2010-11 financial year.

Hambi loko hi pfumelelana na Bili leyi kuna leswi landzelaka. Loko hi vulavula hi Mpimanyeto wa Timali xana mfumo wu endla yini hi mali leyi ngo boheleriwa enengeni wa mpfuvu yi famba? Loko mi kamba leswaku i timasipala tingani ti nga nghenisiwa eka section 139 nhlamulo swi vula mali leyi nga famba. Sweswi hi pfumelela Nkavelo wa Timali lowu nga mpimanyeto wun’wana. Hi ya nyika masipala leswaku yi ya yi famba yi lova.

Hikwalaho loko hina va Cope hi ri kona hi lava ku vona leswaku swilo swi famba kahle. Hi ndlela leyi a hi mi chavisi. (Translation of Xitsonga paragraphs follows.)

[Although we agree with this Bill there is this: When we talk about the Budget, what does the government do with the money that is being wasted? When you check how many municipalities are included in section 139, the answer is the amount of money that is wasted. Now we support the Budget Vote, which is another budget on its own. We will give it to the municipality so that it can be wasted.

Therefore we, as Cope, are here to ensure that things go on smoothly. In this way we are not threatening you.]

During the public hearing, Treasury indicated that there were some gaps as far as the formula was concerned and that they were going to review it.

Xi nga vi xitshembiso ntsena. Yi fanele yi langutisisiwa hi vona leswaku ndzandzeriso lowu loko Financial and Fiscal Commission, FFC yi wu tirhisa yi kuma leswaku hi wona mpimanyeto lowu nga ta averiwa mfumo wa le xikarhi, swifundzhankulu na mimfumo ya miganga leswaku mfumo wu kota ku tirha.

Tolo nimadyambu ndzi twe Mutshamaxitulu wa NCOP eka mbulavulo wa yena. Loko ndzi swi vula eka lembeximali leri nga hundza a mi pfumelanga. Mi lo hleka. Sweswi ndza tsaka hikuva a mi hleki. I vule swin’wana mayelana na migodi leyi nga tala laha ka Sekhukhune. (Translation of Xitsonga paragraphs follows.)

[It must not be a promise only. It must be reviewed to ensure that, as a follow up, when the Financial and Fiscal Commission, FFC, implements it, it must find that it is the correct Budget that will be allocated to the national, provincial and local spheres of government so that the government can function.

Yesterday evening, I heard the Chairperson of the NCOP’s speech. When I said it in the previous financial year, you did not believe it. You laughed it off. I am happy now because you are not laughing. He said something concerning the many mines in Sekhukhune.] I can see that there is light inside the Chairperson of the NCOP. He told us that we should wake up and do something.

Ndzi vulavule hi swihlerisisi swa nsuku na swin’wana. A mi kalanga mi pfumela. I swi vurile leswaku ku fanele ku endleka xin’wana na xin’wana leswaku ku va na swihlerisisi. Sekhukhune yi na 31 wa migodi kambe a ku endleki nchumu. Mfumo a wu pfuneti nchumu.

A ndzi ri eBurgersfort Clinic. Loko u ya lahaya swilo swi hlangahlangene, swi hlangahlangene. (Translation of Xitsonga paragraphs follows.)

[I spoke about gold refineries and others. You did not believe me. He said that anything, something, must be done so that there could be refineries. Sekhukhune has 31 mines, but there is nothing happening. The government does not provide any assistance.

I was at Burgersfort Clinic. When you go there things are mixed up, really mixed up.]

I would like to tell the government - ruling party - to take a step. I said we support the Bill. Therefore, you should start working. Thank you.

Mna H PAPO (Gauteng): Modulasetulo wa Lekgotla la Bosetšhaba la Diprofense, mohl Mninwa Mahlangu, Motlatša Modulasetulo wa Lekgotla la Bosetšhaba la Diprofense, mohl Memela, Sefepisegolo sa Lekgotla la Bosetšhaba la Diprofense, mohl Ntwanambi, Motlatša Tona ya Ditšhelete, mohl Nene, Modulasetulo wa Komiti ya Nakwana ya tša Ditšhelete, mohl De Beer, Modulasetulo wa Komiti ya Nakwana ya tša Ditekatekanyo, mohl Chaane, Ditonakgolo, baemedi ba diPrimiya tša diprofense tša naga ya Afrika Borwa, maloko a Lekgotla la Bosetšhaba la Diprofense, malokokanna a makgotlatheramolao a naga ya Afrika Borwa, tšhomišo e botse ya ditšhelete tša setšhaba ke e nngwe ya dikokwana tša mmušo wa temokrasi. Re le profense ya Gauteng, re thabela go tšea karolo mo poledišanong ye ya Molaokakanywa wa Karoganyo ya Letseno la Mmušo la 2010 le 2011.

Le ge re tšweleditše go tshwenyega mola le mola, le dikakanyo mabapi le Molaokakanywa wo, Gauteng e ya o thekga. Re thabela dibilione tša ka godingwana ga 58 tše di abetšwego profense ya rena. (Translation of Sepedi speech follows.)

[Mr H PAPO (Gauteng): Hon Chairperson of the National Council of Provinces, hon Mninwa Mahlangu; Deputy Chairperson of the National Council of Provinces, hon Memela; the Chief Whip of the National Council of Provinces, hon Ntwanambi; Deputy Minister of Finance, hon Nene; the Chairperson of the Select Committee on Finance, hon De Beer; the Chairperson of the Select Committee on Appropriations, hon Chaane, Ministers, representatives of premiers of the different provinces in South Africa, members of the National Council of Provinces, and members of provincial legislatures in South Africa, efficient and effective use of public finance is one of the principles of democratic government. We are glad as members of the Gauteng Legislature that we are taking part in the debate on the Division of Revenue Bill 2010-2011.

Even though we indicated a few challenges and also gave our opinions on the Bill, we support this Bill as members of the Gauteng legislature. We appreciate the allocation of more than R58 billion for our province.]

We also welcome the review under way of the equitable share formula. For the review process to be expedited, it is important for the Select Committees on Appropriations and Finance, respectively, to work closely and co-ordinate with finance portfolio committees of provincial legislatures.

We say this because reports of the Select Committees on Finance and Appropriations and decisions of this House on matters of the division of revenue have a direct impact on the work which is supposed to happen in the provinces and in the municipalities. Therefore, it is important that there is closer co-ordination between the two select committees and the provincial portfolio committees. I thank you. [Applause]

Mr K D MOLUSI (Northern Cape): Hon Chairperson of the National Council of Provinces, hon Deputy Chairperson of the National Council of Provinces, hon Deputy Minister of Finance, hon MECs and hon members, the Division of Revenue Act sets out three-year allocations for an equitable share and conditional grants for provinces and local government. The contraction of the South African economy in the first half of the 2009-10 fiscal year has meant a reduction in tax revenue.

On behalf of my province, I would like to thank our government for not cutting spending over the coming medium-term even though the tax revenue will only recover slowly from its slumps. We also welcome the provision of a substantial share of nationally collected revenue from provinces to strengthen social services programmes that have an impact on human development and quality of life.

We further welcome the aggregate increase over baseline of the next Medium- Term Expenditure Framework, MTEF, period to sustain the social progress made in recent years. This will strengthen the government’s broader developmental objective and further mitigate the effect of the recession on the poor.

With regard to conditional grants, we take note and welcome the introduction of four conditional grants to provinces, in particular the Expanded Public Works Programme for the social sector, which will assist greatly to ensure that home community-based care volunteers are paid. The recapitalisation grant for technical secondary schools will be used to provide equipment and facilities for these schools and improve the levels of skills required by the economy.

However, the creation of the further education and training colleges grant to facilitate the transfer of further education and training colleges to the national government caused great challenges in the Northern Cape. As part of the preparatory stage to shift the function, the amount spent by each province in this grant was ring-fenced to create the baseline for a new national grant.

The amount ring-fenced out of the province’s equitable share would be received back and thus there would be no direct impact. Out of the Northern Cape equitable share baseline, an amount of R287,3 million over the MTEF period was taken away and only R160,5 million was reallocated as a conditional grant. A shortfall of R126,7 million must be financed from other equitable shares.

We further note and welcome the introduction of the Dinaledi schools grant with its intention to provide support to Dinaledi schools to enhance the quality of mathematics and science achievement in Grade 12 in these schools. Although the Expanded Public Works Programme Incentive Grant, which was introduced in the Expanded Public Works Programme, EPWP, Phase 2, is not new, we appreciate its intention to reinforce and reward public bodies that actually implement labour-intensive methods and utilise the existing infrastructure location effectively to increase the labour content of infrastructure delivery.

We further welcome the increase in the incentive amount for rural municipalities from R50 to R60 per person for a day’s work. However, the challenge with the grant is that provinces and municipalities still find it difficult to integrate it through their infrastructure programme because, although it is allocated to provinces and thus included in the Appropriation Act of the province, the eligibility to access the incentive grant depends on or is based on performance in the previous quarter, once the thresholds have been met. If thresholds are not met, which is the issue in most cases, it will imply that the provinces, in real terms, will underspend their appropriate budget in that particular year. It would, however, be good practice not to appropriate indicative incentive allocations, but instead to claim from the national department as the eligible provincial departments meet their targets.

With regard to the provincial equitable share formula, does the equitable share formula adequately address the expenditure needs of the province? The fiscal disparities arise from two sources: Firstly, provinces may differ in their fiscal capacity - that is their ability to raise a particular level of revenue - given the revenue assigned to them with administrative effect. Secondly, provinces may also differ in their expenditure needs. Even when they have the same fiscal capacity, they may differ in the costs they faced in the provision of a standardised basket of public services due to geographic and climatological conditions.

In this regard, geographically large provinces such as the Northern Cape province will have to spend more on transportation infrastructure and possibly on recurrent operations in order to achieve the same level of service as smaller provinces.

Furthermore, the variations in regional prospectus are caused by two separate phenomena: Firstly, less densely populated areas typically require higher levels of government service and thus create higher costs because it is more costly to serve a population that is more spread out. Secondly, the cost of providing a standard unit of government service may be higher in less densely populated and more remote areas.

Geographically the Northern Cape shares approximately 30% of South African’s land area. The institutional component of the provincial equitable share formula, which constitutes 5% of total transfers, is given to provinces in equal amounts to each province, irrespective of the size. The underlying logic is that there are fixed costs associated with the establishment of the institution for the provincial government and delivery of public services.

Given the difference in expenditure needs, does this logic still hold? It must be further noted that during the 2005-06 Division of Revenue Act, the vastness of the area of the Northern Cape was recognised and it was discovered that the amount was top-sliced to address the road infrastructure. However, the cost of delivering the service is not yet recognised. We understand that the current equitable share formula is currently under review and I think as an oversight body we must take up an active role in this process.

In conclusion, the Northern Cape province supports this Bill.

Mr V V Z WINDVOËL (Mpumalanga): Hon Chairperson, hon members, guests, comrades and compatriots …

… ke a le dumedisa. Dumelang! [… I greet you all. Greetings!]

Sanibonani! [Greetings!]

Hon Chair, I must say it is nice to be back home away from home. I see you have also improved your Rules to allow points of clarity. I must say, in our legislature that becomes a point of disorder because you are disturbing a member when he is still delivering a good speech. That was Comrade Papo.

It is indeed a great privilege for me to make a contribution in this august House on the occasion of debating the Division of Revenue Bill of 2010, in the year which the ANC has declared as the year of working together to speed up service delivery to the people.

Let me take just a short left.

Sihlalo ohloniphekile, ngizwe uMnumzane Lees lapha, ekhuluma okunye okuyindida. Uma eqala uthe, uMphathiswa ulisike kahle lelikhekhe, lendlaleka kahle. Eseqhubeka nenkulumo yakhe … [Hon Chairperson, I heard Mr Lees here saying something confusing. When he started he said the Minister sliced this cake and allocated it perfectly. When he continued with his speech …]

… he then criticised that there is unacceptably more allocation to social welfare, which is there to address the downtrodden people left in the lurch by the apartheid regime. In short, the DA is saying: let us cut the social grants, poverty alleviation programmes and other means and measures that are there to assist and uplift the previously disadvantaged people who were oppressed by the previous regime. Now I understand the reason that the DA- led Cape Metropolitan Municipality decided to build toilet pans without walls and call them toilets.

Noma sekuthiwa kusobala kangakanani, ngeke sithi ogogo nomkhulu bethu abayohlala endle kungenazindonga kulezi zinto abazibiza ngokuthi yizindlu zangasese. [No matter how logical it may seem to be, we cannot expect our grandmothers and grandfathers to go and relieve themselves where there are no walls - in the so-called toilets.]

I tried to listen attentively - because listening is a skill - to what hon De Villiers was saying. The only thing I could hear in the time allocated by this august House which was progressive on his part is that tax money is now moving closer to the people with this Division of Revenue Bill. I think in that he is coming closer to the ANC, and I thank him for that. I must also advise him that we expect the Western Cape government and the Cape Metro to put this into practice; to deal with the squalor of the conditions in which our people find themselves in Khayelitsha, Gugulethu and other areas.

I must further say that I could really not make any sense when he spoke about federalism. One of my English teachers told me that if something is not making sense, it is nonsense. What I know is that South Africa is a unitary country. Constitutionally, what we believe in is co-operative governance, as stipulated in Chapter 3 of the Constitution, whereby the three spheres of government are expected to complement each other rather than to compete against each other.

I must then say that this 2010 Division of Revenue Bill, which is being tabled and is going to be adopted today, is indeed in conformity with Chapter 3 of the Constitution. As such, to this end, this Bill put into practical terms and financial logic the affirmation of section 40 of our Constitution when it says:

In the Republic, government is constituted as national, provincial and local spheres of government, which are distinctive, interdependent and interrelated.

Clearly, this 2010 Division of Revenue Bill is crafted and anchored within the context of achieving the five major priorities as set out in the 2009 Manifesto of the ANC, which are designed to impact positively on the lives of the people of this country, as we continue to wage the struggle for a more nonracial, nonsexist and a democratic society.

As a representative of Mpumalanga province, which is one of the rural provinces, you should not be surprised that we are particularly pleased about the fact that this division of revenue is also pro-rural in its nature. Hence, we support the passage of this Bill unreservedly.

This is in line with our manifesto goals, which place rural development as a key priority focus within the context of rebuilding the potential for rural sustainable livelihoods. This prioritisation of rural development is particularly expressed by the Bill through the fact that attention was drawn to the rising allocation to municipalities in both the local government equitable share transfers and the municipal infrastructure grant, MIG, which contribute to the capacity of municipalities to maintain water infrastructure.

Again, we note that measures have also been taken to increase the Expanded Public Works Programme Incentive Grant to smaller and rural municipalities over the 2010 Medium-Term Expenditure Framework, MTEF, period.

Finally, that funding has also been set aside on the Department of Water Affairs’ Budget Vote to accelerate progress in bringing water and associated economic opportunities to rural areas. In Mpumalanga we are well on course, notwithstanding the challenges to address these water issues in our communities through our flagship programme called Water For All.

We are also pleased to note and accept the new Expanded Public Works Programmes Grant for the social sector that will subsidise nonprofit organisations, so that they can pay salaries to care workers currently working voluntarily on social and health-care related matters in our communities. Our people have expressed great appreciation, during our public hearings, to the government for introducing this grant. This intervention will go a long way, especially in poor and rural communities, where nonprofit organisations have relied on volunteers to carry out some of the socioeconomic difficulties faced by our communities without any remuneration.

We would like to support and align ourselves with the view which suggests that steps should be taken, that procedures for shifting of funds and rollovers from municipalities back to the national government should not disadvantage poor performing municipalities and priority should be given to supporting structures to assist such municipalities.

In this regard, we think the view that we should develop procedures that are specifically aimed at both strengthening capacity-building, support for poor performing municipalities and linking initiatives to withhold stock or reallocate grants to specific interventions to address capacity constraints should be applauded.

We strongly uphold this view, because continuous shifting of funds and rollovers back to national government and best performing municipalities could be tantamount to taking from the poor to subsidise the rich. We are particularly pleased as the ANC that this division of revenue is really going to assist our people as we speed up service delivery.

Yes, the President of the country has made a clarion call for our government at all levels to work differently; to work harder, faster and smarter within the context of understanding that this is a year of action. Again, Comrade President Jacob Zuma, when closing the 2010 ANC national executive council lekgotla, said, “In our work, therefore, we should prioritise the people and we must improve on citizen care.”

This also moves in line with what the late president of the ANC, O R  Tambo, said when he was delivering a speech when awarded an honorary degree in law on 19 October 1991, in Fort Hare:

South Africa needs to believe in our capacity to overcome our painful history; to begin again and to regard our failures, when they occur, not as finite moments, but as occasions for a new beginning.

I thank you. [Applause.]

Mr C J DE BEER: Chairperson, it is an historic occasion to participate in this debate in the Limpopo province during Taking Parliament to the People. It is also historic because it is the first time that we debate the Division of Revenue Bill and report to the NCOP as required by the Money Bills Amendment Procedure and Related Matters Act of 2009.

The late Comrade Moses Kotana was an architect of the struggle in this country to set the pace for renewal and to better the lives of our people. The Freedom Charter as adopted in 1955, the strategy and tactics as reviewed by the Polokwane conference, the ANC manifesto for which the ANC- led government received overwhelming support on 22 April 2009 and the state of the nation address inform the division of revenue to address the specific objectives to improve the people’s lives and give them dignity. In 1994, the people of this country got political freedom, but the struggle for economic freedom is still on. That work to get economic freedom, which the late Comrade Moses Kotane started, still continues.

Last Thursday, the new alliance of the opposition parties had the audacity to put forward a motion of no confidence in the Head of State of this country. One thing that they forget is that the Head of State of this country engaged with countries of the world to get programmes going, to uplift the people in Africa to get water and to get sanitation and went to Copenhagen to engage with countries of the world to set the pace and get sensible resolutions to save the world. That is the Head of State about whom they put forward a motion of no confidence.

During the state of the nation address, the Head of State gave the marching orders for South Africa for the next five years. Going back to 22 April, South Africa’s people spoke, and last Thursday Parliament spoke, and the opposition dismally failed.

The ANC government steeled its resolve to create a better life for all and roll back the frontiers of poverty by focusing on the five manifesto priorities as demonstrated in the equitable division of revenue across all its spheres. Hon Lees came to the podium and addressed this House regarding the social welfare of our people - that we create a social welfare system at the expense of economic development. Sometimes it seems to me people cannot read, because we dealt with a review of the Budget; we dealt with the speech of the Minister of Finance, and we dealt with the Budget as a whole and with the division of revenue.

It is all set in a programme to get South Africa economically viable and to get jobs for our people. What is the reality in this country? We had Bantustans - this province where we are now had two - the former Venda and Lebowa. The then National Party did not spend what it was supposed to spend on water, sanitation and job creation in the Bantustans. Go and read the Tomlinson Report, which you can get at the library in Parliament. It will give you the facts. That is the history and that is why we must deal with the reality as it is now.

The statement is made that we lied for 15 years and made promises. Memories are very short. Since 1995, 1 568 new schools were built, 47 771 new classrooms were erected and 13,6 million people are receiving social grants and can say tonight that they have got bread on the table. You want to take it away. If you take it away, what do you put in its place? What answer are you going to give to the constituency if you take the statement that you made on this podium? How are you going to do that?

Five hundred new clinics were built, 2 298 were upgraded, 125 mobile clinics were established, 13 new hospitals were built and 2,9 million houses were built. That is a reality. Now it is said that we make promises and we cannot keep the promises. I think we must give the opposition a political education lecture.

The division of revenue as a developmental tool should be acute in correcting the past wrongs and past imbalances and create a democratic society. South Africa is a country in transition, from a past of the exclusion of the majority from decent services. We admit the challenges are huge. We also admit we must still do more. We are not running away from our responsibilities. Many of our provinces are a conglomeration of the erstwhile South African Development Trust and the former Bantustans. This led to tension amongst provinces in resource allocation and service delivery. The provincial equitable share allocations, the local government equitable share allocations per municipality and all other allocations are allocations to meet target priority programmes of government.

The ANC supports the objectives of the Division of Revenue Bill as stated in section 2 of the Bill specifically referring to accountability by ensuring that all allocations are reflected in the budget of receiving provinces and municipalities, and by ensuring that expenditure of additional allocations is reported on by the receiving provinces and municipalities and its implementation.

The total equitable share to provinces is R260,9 billion, of which R61,8 billion is in conditional grants, totalling R322,8 billion to assist provinces to see that the circumstances of their people are improved.

The ANC is committed to increasing its oversight and we will do it. We are starting this weekend during the constituency period to see to it that the allocated funds towards our spending priority are well spent. I am referring to expanding employment and safeguarding social security, improving quality education and skills development, improving health care, rural development, and creating a built environment to support economic growth and to combating crime and corruption.

We are serious when we say we want clean governance and co-operative governance standards that must not be compromised. The division of revenue in the hands of government, based on the will of the people and the people- centred and people-driven principle, should be outcomes-based.

My time was cut, but the ANC supports this Division of Revenue Bill. Thank you. [Time expired.]

The CHAIRPERSON OF THE NCOP: Your time has not been cut, hon member. Your speaking time has expired.

The DEPUTY MINISTER OF FINANCE: Chairperson, let me, again, take this opportunity to thank all members for supporting this Division of Revenue Bill. A number of points which show that our democracy is indeed maturing, particularly when it comes to dealing with issues that relate to addressing the inequalities of the past, were raised.

The chair of the committee spoke about the need to stretch limited resources at this trying time. Never in our history has this point been so relevant. Never in our history has the economic question – that of satisfying unlimited wants with limited resources - been so glaringly important.

Members unanimously raised the issue of the importance of oversight once resources have been deployed. I indicated in my speech earlier that all the recommendations that the committee has made will be taken seriously. Some of them will actually be carried forward into the next financial year, as it was not possible to accommodate all of them during this financial year.

Members have already dealt with Mr Lees’s dilemma of coming from a different planet to the one we are on. You see, I grew up in a rural area where people would travel in tractors and sit at the back. Whilst all of them were facing the front, a few delinquents would be facing backwards; that is what we experienced. When everybody else is facing in one direction, in order to build, one of us is facing backwards. So, if anyone of us was wondering what happened to the perpetrators of the deliberate exclusion of our people from economic participation, now we know where they are; they are still in our midst. [Applause.]

We survived the structural adjustments in the past. For an hon member to come before this House and say that this Budget is skewed towards social expenditure instead of funding economic infrastructure just shows that we really represent different constituencies.

If we are blind to the fact that our people are still poor out there, we are not going to see the need for us to balance the two. Whilst we invest in the productive capacity of this country in order to build the economy, we also need to look at how best we can address the plight of the people who otherwise cannot mitigate the poverty that they live in.

I agree that local government receives a smaller share, but anybody who understands how government works knows that local government is actually supposed to rely more on the revenue that it raises. A number of members raised the issue of how important it is that local government is assisted in boosting its capacity to be able to collect its own revenue, but also at the same time to make sure that government departments and all other people who owe rates to local government pay those on time. If this does not happen, I want to urge members - as public representatives – to make sure that those are taken up and necessary steps are taken in order to address it.

I agree with the MEC from North West with regard to the provincial equitable share. I have made an offer to the MEC to mediate between North West and Gauteng, because we have a similar complaint from Gauteng - that they inherited an influx of functions that came from North West and that the allocation that we transferred from the North West is not adequate. So, we have the two to balance.

With regard to the issue of the equitable share review, at both provincial and local government levels, the support for this review is appreciated and it came from all members across the board. I would also just like to indicate that the Financial and Fiscal Commission forms part of the review team that deals with this. The issue of inward immigration from rural areas into some of our cities is also fully appreciated, and the updating of data, in order for us to be able to deal with this, is under way. I also want to indicate that the other problem that we are faced with is that in order for us to stop our people from migrating from the rural areas into towns, we need to develop the rural areas in order for them to be able to absorb their own people as well as ensure that they are economically viable, so that people do not move to the towns in order to search for greener pastures. We still have this balance that we all need to work towards addressing.

With regard to the issue of unfunded mandates that came up from the member from KwaZulu-Natal, again we agree. But, I must indicate that National Treasury has an even bigger unfunded mandate, because in order for us to finance our borrowing to finance our expenditure, we need to service the debt. So, we need to balance the two, particularly at this time when we cannot raise adequate revenue, because we will all suffer as a result of that. Therefore, the issue of reprioritisation becomes even more critical than before.

We have identified savings in some of the provinces and departments, and we request that members assist us in making sure that departments, provinces and local governments begin to look at their priorities and cut noncore expenditure in order to spend where our priorities lie.

Every time the budgets are passed at local government level, one of the things that we should look at is what the priorities of local government are. Some of the things might be nice to have, but may not be necessary at this time for us to fund. We, therefore, would like to call upon members to assist us during their oversight to ensure that that happens.

I cannot overemphasise the point I touched on earlier, that of payments of accounts to municipalities on time. In fact, it is a provision in the Public Finance Management Act, PFMA, that that should be the case. If there are disputes on accounts, provinces and municipalities should agree on how to resolve them. Again, we offer to mediate if there are any problems.

It is impossible for me to deal with all the issues raised. I have taken copious notes; my officials are also here. Those that are within our powers to address, we will, and those that are not, we call on the collective wisdom of this august House to assist us in addressing. Thank you, Chairperson, and thank you for supporting the Division of Revenue Bill. [Applause.]

Debate concluded.

Question put: That the Bill be agreed to.

IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.

Bill agreed to in accordance with section 65 of the Constitution.

CONSIDERATION OF REPORT OF SELECT COMMITTEE ON CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS - OVERSIGHT VISIT TO NALA LOCAL MUNICIPALITY IN FREE STATE

CONSIDERATION OF REPORT OF SELECT COMMITTEE ON CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS - OVERSIGHT VISIT TO THABO MOFUTSANYANA DISTRICT MUNICIPALITY

Mr M H MOKGOBI: Chairperson, Deputy Minister, the Chief Whip of NCOP, provincial leaders and members, in the true spirit of the Freedom Charter, the ANC has introduced a system of local government as the antithesis to the previously racially fragmented local council. The 2000 municipal elections marked a fundamental transformation in municipal governance. The clause “The people shall govern” gained expression when this sphere was electively put in place for things to happen where we live.

The select committee, upon receiving the notices from the province of the Free State, immediately engaged in a trip to find out whether there was legislative and constitutional compliance in terms of the two municipalities. This was done to ensure that everyone is given a platform to express their views in terms of that section. On 24-25 February 2010, the delegation of the committee had this engagement. Amongst the other stakeholders that we met there were speakers, executive mayors, chief whips, administrators, ward committees, organised labour, community forums, Salga and business communities.

The main objective was the need to solicit an opinion and make to the House an informed recommendation for approval or disapproval of the interventions. Having evaluated and assessed various inputs as the committee, we therefore made recommendations to the House regarding municipal governance that has been found to be in shackles; service delivery that does not speak to the integrated development plans, which lack consultation and public participation and which do not address the needs of the people, and the national and millennium development targets which, we fear, might not be met in these two municipalities. It remains to be seen whether there will be an improvement or not in the local economic strategy of these municipalities.

Financial viability and management also constitute a challenge because they are punctuated by disclaimers of adverse audit opinions. The other issue that was looked into was the human resource management plans which we found were not in existence. The recruitment strategy was just haphazard and the issue of salaries were in disparity. There was a general lack of compliance in terms of those five key strategic local government agendas.

Therefore, the committee is of the opinion that, in terms of the recommendations to the Thabo Mofutsanyana District Municipality, Firstly, this Council should approve the intervention as issued by the provincial executive, as we found that it complies with the legislative and constitutional requirements.

Secondly, the administrator should fast-track the process of appointing section 57 managers as this is one element that will ensure that the municipality does return to normal.

Thirdly, the administrator should conduct a proper and thorough investigation and report to the MEC and the NCOP on the possible link between the resignation of the former municipal manager or any other form of misconduct that has since contributed to the current crisis in that municipality.

Fourthly, the administrator should also conduct a proper and meticulous reconciliation of payments on the litigation and legal costs of its debt collectors and attorneys so as to enable the municipality to avoid fruitless and wasteful expenditure.

Fifthly, the Free State MEC for Co-operative Governance and Traditional Affairs should table quarterly reports to the committee of the NCOP, in particular this committee.

Sixthly, the SA Local Government Association, in co-operation with the local government sector education and training authority, should facilitate training and capacity-building for municipal councillors to deepen their understanding of the oversight role, legal framework and financial issues.

Seventhly, the Select Committee on Co-operative Governance and Traditional Affairs, in co-operation with relevant portfolio committees in the Free State provincial legislature, should conduct a follow-up visit to this municipality within three months in order to monitor progress made in respect of the directives issued in terms of this intervention.

Chairperson, on the Nala local municipality: Firstly, the select committee recommends to the National Council of Provinces approval of the intervention as issued by the provincial executive council in terms of section 139(1) (b) of the Constitution, as we found that there is compliance in terms of the necessary procedures and constitutional requirements.

Secondly, the administrator should fast-track the process of appointing section 57 managers and assist the municipality in developing a labour retention strategy so as to ensure that social service delivery projects are not compromised.

Thirdly, the administrator should conduct a proper and thorough investigation and report to the Free State MEC and the NCOP on the alleged cases of misappropriation of funds in this municipality.

The MEC for Co-operative Governance and Traditional Affairs has to immediately reconsider the current appointment of the municipal manager, since the appointment is surrounded by and shrouded with allegations of corruption and maladministration. Let me just make a point: When the committee was busy conducting this engagement, the community nearly stormed the hall precisely because they did not want to see the municipal manager. We are not making an implication, but we are saying there are serious issues that need to be looked into around that position. The administration should ensure that individually reported cases to the SA Police Service are changed to municipal cases. There is evidence in this regard of forged cheques of about R650 000 with signatures of people that need to be investigated.

The Free State MEC for Co-operative Governance and Traditional Affairs should table a quarterly report to the NCOP and the Free State provincial legislature on the status of the intervention and the progress thus far. The SA Local Government Association, in co-operation with the local government sector education and training authority, should facilitate training and capacity-building for municipal councillors to deepen their understanding of the legislative environment. The SA Local Government Association should further facilitate executive training programmes for municipal officials.

The Minister for Co-operative Governance and Traditional Affairs should institute an independent forensic investigation into all the financial affairs of the Nala local municipality, including, amongst others, the companies that are alleged to be ghost companies, which means they are doing the work but they do not exist. The committee further proposed that there should be a mechanism in place that would assist to track the resolution and decisions taken and table them in the House within three months. This will ensure that things are done differently – faster, smarter and harder.

The approved report by the NCOP should be shared amongst both internal and external stakeholders as there is an outcry that Parliament does visits but there is no feedback. The Select Committee on Co-operative Governance and Traditional Affairs, in conjunction with relevant portfolio committees in the Free State provincial legislature, should conduct a follow-up visit within three months after interventions have ended.

The National Department of Co-operative Governance and Traditional Affairs should introduce legislation to regulate the implementation of section 139. Chairperson, the emphasis here is that there is no homogeneous application of this section. We find different applications of the same matter. Therefore, we sincerely motivate that legislation be put in place that would help to produce either a manual or guidelines to procedures.

In conclusion, Chairperson, let me take this opportunity to thank members of the House, hon members of the committee, the Chief Whips for their guidance, the leadership, the Chairperson and the Deputy Chairperson, and the support both directly and sympathetically from this House. I thank you.

Debate concluded.

Question put: That the Report on Oversight Visit to Nala Local Municipality in Free State be adopted.

IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.

Report on Oversight Visit to Nala Local Municipality in Free State accordingly adopted in accordance with section 65 of the Constitution.

Question put: That the Report on Oversight Visit to Thabo Mofutsanyana District Municipality be adopted.

IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limopo, Mpumalanga, Northern Cape, North West, Western Cape. Report on Oversight visit to Thabo Mofutsanyana District Municipality accordingly adopted in accordance with section 65 of the Constitution.

CONSIDERATION OF REPORT OF SELECT COMMITTEE ON LAND AND ENVIRONMENTAL
   AFFAIRS - DEPROCLAMATION OF PORTION OF LOWVELD BOTANICAL GARDEN

Ms B P MABE: Chairperson, I refer to the report of the Select Committee on Land and Environmental Affairs on the request from the Minister of Water and Environmental Affairs for the exclusion of a portion of state land from the Lowveld National Botanical Garden. In terms of section 34(2) of the National Environmental Management: Biodiversity Act, Act 10 of 2004, a part of a national botanical garden on state land may not be excluded from it except by resolution of both Houses of Parliament. As a result of this, the Select Committee on Land and Environmental Affairs was briefed by the Department of Water and Environmental Affairs on the process followed in the deproclamation of a portion of the Lowveld Botanical Garden in order to expand the N7 national road.

Having deliberated on the matter, the Select Committee on Land and Environmental Affairs recommends that the NCOP resolves to approve the request for the withdrawal of 1,47 hectares of portion 30 and a portion of portion 14 of the farm Boschrand, No 283-JT of state land, from the Lowveld National Botanical Garden. The committee further recommends that, for future developments, the department should ensure that proper consultation with all relevant stakeholders is undertaken before the implementation of projects. I thank you, Chair. [Applause.]

Debate concluded.

Question put: That the Report be adopted.

IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.

Report accordingly adopted in accordance with section 65 of the Constitution.

            SAFETY AT SPORTS AND RECREATIONAL EVENTS BILL

            (Consideration of Bill and of Report thereon)

Ms M W MAKGATE: Chairperson and hon members, South Africa is increasingly becoming a desired destination for major international sporting, recreational, political and socioeconomic events. It is government’s policy to attract and support the hosting of such major events in the country.

Our experience in hosting major events has equally brought with it the occurrences of disasters in sports such as the Ellis Park in Johannesburg and the Oppenheimer stadium in Orkney. These disasters have taken place despite the fact that the provincial sports federations were charged with the responsibility not only to host the events but also to ensure the safety and security of persons attending the events.

Often event organisers fail to accept or resist accepting their responsibility to provide adequate security at events, and many events have been hosted without proper or sufficient public liability being in place. Government has a duty to ensure the following: The safety and the protection of the physical wellbeing of both persons attending sports and recreational events and their property at stadia and other such venues; the protection of rights of persons who attend sports and recreational events; and that the planning, management and enforcement of safety and security at sports and recreational events held at stadia, other venues and at events in the form of a race, tour or procession along a route are handled by people that are experienced in the field of safety and security.

The Safety at Sports and Recreational Events Bill aims to protect the primary stakeholder at the events, which is the general public, who attend thousands of sporting and recreational events held across the country each year. Compared to comparable legislation in other countries, the Bill is reasonable. An example is the United Kingdom system, which is overreaching and intrusive, whereas the South African Bill adopts a more reasonable middle-ground approach, which incorporates the necessary constitutional safeguards.

The Bill has been created to cater specifically for the needs of South Africa and its Constitution. Although the Bill is a reasonable piece of legislation, it still has teeth. For instance, it provides for the issuing of exclusion notices to deal with hooliganism and provides for sub prohibition notices and for heavy penalties in respect of noncompliance.

The Bill provides that the powers that the provincial sports federations have to convene sports events and ensure safety and security is overridden by the powers of the SA Police Service through their command structures to take control of any sporting event in any geographical area. In this regard, the SAPS will make a determination on any event and, where it deems it necessary, it will take control of that event.

In terms of the Bill, the proper event safety and security measures would rest with the controlling body, event organiser or stadium or venue owner, who, if a natural person, must be at least 21 years of age.

Although the 2010 Fifa World Cup South Africa Special Measures Act, Act 11 of 2006, has been passed and regulations under it were issued, this Act deals with specific issues. The Act does not deal with key safety and security areas such as ticketing matters, minimum measures to ensure safety as opposed to security of the general public and the establishment of general offences and penalties for antisocial behaviour inside and immediately in the vicinity of the 2010 stadia.

The Bill provides that a controlling body, an event organiser or stadium or venue owner must appoint sufficient persons to be responsible for safety and security at an event, including an event safety officer, security officers or such other persons as prescribed. Stewards are responsible for the marshalling and overseeing of the safe general flow of spectators. An event organiser must ensure that a detailed written safety plan, which includes the following, is prepared: Event risk assessment; event details, including duration; stadium, venue or route design; and safe capacity and compliance with other relevant safety certification.

If the National Commissioner of the SAPS, event safety and security planning committee, authorised member or venue operations centre, VOC, commander have reasonable grounds to believe that there is a threat that the attendance of a person or group of persons may result in the disruption of the event or cause injury to a person or damage the property, the authorised member or the VOC commander may issue a spectator exclusion notice to a person or group of persons. During our deliberations as the NCOP, we have raised the following questions: The requirement that the organiser of an event be at least 21 years of age; that there is no obligation on the part of the authority to issue safety certificates; the attendance of the members in safety committee meetings; the adequacy of the capacity of security personnel; and public liability insurance and the meaning of gross negligence.

The Select Committee on Education and Recreation supports the passing of the Safety at Sports and Recreational Events Bill and in doing so it acknowledges that the Bill has been passed by the select committee without amendments.

The Select Committee on Education and Recreation supports the Bill. I thank you. [Applause.] Debate concluded.

Bill agreed to in accordance with section 75 of the Constitution.

CONSIDERATION OF REPORT OF SELECT COMMITTEE ON SECURITY AND CONSTITUTIONAL DEVELOPMENT - REGULATIONS MADE IN TERMS OF SECTION 97(1) OF THE CHILD JUSTICE ACT 2008

Mong T M H MOFOKENG: Modulasetulo le maloko a Ntlo a hlomphehang, Komiti e ile ya kopana le lefapha ka di 12 le ka di 24, e le ho tla utlwa tlaleho e mabapi le diphetoho tse sisintsweng ho ya ka karolwana ya 97 ya molao wa toka wa bana wa selemo sa 2008. Tlaleho ena e ne e tsamaya le diphatlalatso tse tlo etswa ke Mokomishenara wa Sepolesa ka labohlano la hosane. Molao ona o tla kena tshebetsong ka di 1 kgweding e tlang.

Komiti e sisintse hore jwalokaha e ntshetsa pele ditabatabelo tsa diporofensi, ho be le phetoho moo molawana o buang ka hore, ha ngwana a lemetse a le tlhokomelong ya sepolesa, ho tsebiswe le Mokomishenara wa porofensi. Hajwale molawana ona o supa feela hore Motsamaisi wa seteishene a tsebise Mokomishenara wa naha. Hona ho tla tlisa lenyatso tsamaisong ya taolo ya sepolesa.

Komiti e supile le ho ngongoreha ka hore melao ena e hloka nako, empa leha ho le jwalo, lefapha le tla ho se ho setse nako e nyane. Hodima moo le romela le basebeletsi ba sa kgoneng ho nka diqeto. Kahoo, komiti e etsa boipiletso hore mafapha a tle ka nako ha ho na le melao e hlokang hore e lekolwe ka bobatsi. Nakong e tlang, e ke ke ya tshehetsa melao e tliswang ka lehlaphahlapha ntle le hore e lekolwe hantle. Re kopa Ntlo hore e amohele tlaleho ena. Ke a leboha. [Mahofi.] (Translation of Sesotho paragraphs follows.)

[Mr T M H MOFOKENG: Chairperson and hon members of the House, the committee met with the department on the 12th and 14th in order to listen to the report regarding the changes that have been suggested in accordance with section 97 of the Child Justice Act of 2008. This report was accompanied by the pronouncements that will be made by the Commissioner of Police tomorrow, on Friday. This Act will go into effect on the first of next month.

The committee has suggested that as it is responsible for the needs of provinces, there should be some changes where the Act refers to the instance where a minor sustains injuries while in police custody, such as that the commissioner of the province should be notified. At present, the Act only stipulates that the station commander should notify the National Commissioner of Police. This can lead to disrespect within the police.

The committee indicated as well as expressed the concern that these Acts need time but, nevertheless, the department came when there was very little time left. On top of that it sent people who are not able to make decisions. Therefore, the committee would like to make the request that departments must come early when there are Acts that need to be discussed in detail. In future, it will not support Acts that are brought to it in a hurry without thorough consultation. We would like to ask the House to accept this report. I thank you. [Applause.]]

Debate concluded.

Question put: That the Report be adopted.

IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.

Report accordingly adopted in accordance with section 65 of the Constitution.

The CHAIRPERSON OF THE NCOP: Before I close this session, may I request that all the chairpersons of committees remain behind for five minutes with me, the Chief Whip and all presiding officers. May I also request that the following members also remain behind: They are hon Bekker from the DA, hon De Beer from Cope and hon De Villiers from the DA. That concludes the business for the day. The House is adjourned until 9 o’clock tomorrow morning.

The Council adjourned at 20:02. ____

            ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS

                        FRIDAY, 12 MARCH 2010

TABLINGS National Assembly and National Council of Provinces

1. The Speaker and the Chairperson

(a)     Letter from the Minister of Public Works dated 11 March 2010,
    to the Speaker of the National Assembly requesting for the
    withdrawal of the Department of Public Works Strategic Plan for the
    period 2010 – 2013.

    2010-2013 DEPARTMENTAL STRATEGIC PLAN AND ENTITIES IN PARLIAMENT

    The Department of the Public Works’ strategic plan was tabled in
    Parliament on the 3rd of March 2010. There have been noticeable
    inaccuracies in the tabled document which have to be rectified by
    the Department.

    The amendments made to the departmental strategic plan of the
    department and further undertake to table the amended version to
    Parliament within two (2) weeks. Note that the aligned strategic
    plans of the sector entities, namely, Construction Industry
    Development Board (CIDB), Council for the Built Environment (CBE),
    Independent Development Board (IDB) and Agrément South Africa (ASA)
    will also be tabled within the said two (2) weeks.


    I sincerely apologise to Parliament and its committees for the
    inconvenience caused as a result of these developments.

    Yours sincerely,
    (Signed)
    G Q M DOIDGE (MP)
    MINISTER
    Date:  11/03/2010

    Cc:      Hon G Olifant – Portfolio Committee on Public Works
        Hon Sibande MP – Select Committee on Public Services

1. The Minister of Public Enterprises

 a) Eskom’s 2010/11 tariff increase and amended pricing structure for
    municipalities with effect from 1 July 2010, in terms of section 42
    of the Local Government: Municipal Finance Management Act, 2003
    (Act No 56 of 2003).

                        MONDAY, 15 MARCH 2010

ANNOUNCEMENTS

National Assembly and National Council of Provinces

The Speaker and the Chairperson

1. Introduction of Bills

 (1)    The Minister of Justice and Constitutional Development
      a) Prevention and Combating of Trafficking in Persons Bill [B 7 –
         2010] (National Assembly – proposed sec 75) [Explanatory
         summary of Bill and prior notice of its introduction published
         in Government Gazette No 32906 of 29 January 2010.]


         Introduction and referral to the Portfolio Committee on Justice
         and Constitutional Development 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 Bill may be submitted to the JTM within three
         parliamentary working days.

1. Draft Bills submitted in terms of Joint Rule 159

(1)    Black Authorities Act Repeal Bill, 2010, submitted by the
     Minister of Rural Development and Land Reform.


  Referred to the Portfolio Committee on Rural Development and Land
     Reform and the Select Committee on Land and Environmental Affairs.

TABLINGS

National Assembly and National Council of Provinces

1. The Minister of Public Enterprises

a) Tariff increase for 2010-11 and amendment to Eskom's pricing
   structure for municipalities, tabled in terms of section 42(4) of
   the Local Government: Municipal Finance Management Act, 2003 (Act No
   56 of 2003), and supporting documents required in terms of section
   42(3) of the same Act.

1. The Minister of Water and Environmental Affairs

 a) Albany Coast Water Board’s Proposed Water Tariffs for 2010-11,
    tabled in terms of section 42 of the Local Government: Municipal
    Finance Management Act, 2003 (Act No 56 of 2003).

(b)     Amatola Water Board’s Proposed increase in Water Tariffs for
    2010-11, tabled in terms of section 42 of the Local Government:
    Municipal Finance Management Act, 2003 (Act No 56 of 2003).


(c)     Bloem Water Board’s Proposed increase in Water Tariffs for 2010-
    11, tabled in terms of section 42 of the Local Government:
    Municipal Finance Management Act, 2003 (Act No 56 of 2003).


(d)     Botshelo Water Board’s Proposed increase in Water Tariffs for
    2010-11, tabled in terms of section 42 of the Local Government:
    Municipal Finance Management Act, 2003 (Act No 56 of 2003).


(e)     Bushbuckridge Water Board’s Proposed Water Tariffs for 2010-11,
    tabled in terms of section 42 of the Local Government: Municipal
    Finance Management Act, 2003 (Act No 56 of 2003).


 f) Lepelle Northern Water Board’s Proposed increase in Water Tariffs
    for 2010-11, tabled in terms of section 42 of the Local Government:
    Municipal Finance Management Act, 2003 (Act No 56 of 2003).

 g) Magalies Water Board’s Proposed increase in Water Tariffs for 2010-
    11, tabled in terms of section 42 of the Local Government:
    Municipal Finance Management Act, 2003 (Act No 56 of 2003).


 h) Mhlathuze Water Board’s Proposed increase in Water Tariffs for 2010-
    11, tabled in terms of section 42 of the Local Government:
    Municipal Finance Management Act, 2003 (Act No 56 of 2003).

(i)     Namakwa Water Board’s Proposed increase in Water Tariffs for
    2010-11, tabled in terms of section 42 of the Local Government:
    Municipal Finance Management Act, 2003 (Act No 56 of 2003).


(j)     Overberg Water Board’s Proposed increase in Water Tariffs for
    2010-11, tabled in terms of section 42 of the Local Government:
    Municipal Finance Management Act, 2003 (Act No 56 of 2003).


(k)     Pelladrift Water Board’s Proposed Water Tariffs for 2010-11,
    tabled in terms of section 42 of the Local Government: Municipal
    Finance Management Act, 2003 (Act No 56 of 2003).


(l)     Rand Water Board’s Proposed increase in Water Tariffs for 2010-
    11, tabled in terms of section 42 of the Local Government:
    Municipal Finance Management Act, 2003 (Act No 56 of 2003).


(m)     Sedibeng Water Board’s Proposed increase in Water Tariffs for
    2010-11, tabled in terms of section 42 of the Local Government:
    Municipal Finance Management Act, 2003 (Act No 56 of 2003).


n) Umgeni Water Board’s Proposed increase in Water Tariffs for 2010-11,
   tabled in terms of section 42 of the Local Government: Municipal
   Finance Management Act, 2003 (Act No 56 of 2003).

                       TUESDAY, 16 MARCH 2010

TABLINGS

National Assembly and National Council of Provinces

1. The Minister of Tourism

 a) Strategic Plan of the Department of Tourism for 2010/11 – 2014/15.

1. The Minister of Women, Children and People with Disabilities

 (a)    Strategic Plan of the Department for Women, Children and Persons
    with Disabilities for 2009 – 2014.

COMMITTEE REPORTS

National Council of Provinces

1. Report of the Select Committee on Education and Recreation on the Safety at Sports and Recreational Events Bill [B7B – 2009], dated 16 March 2010:

   The Select Committee on Education and Recreation, having considered the Safety at Sports and Recreational Events Bill [B7B – 2009], (National Assembly – sec 75), referred to it and classified by the JTM as a section 75 Bill, reports that it has agreed to the Bill.

Report to be considered.

                      WEDNESDAY, 17 MARCH 2010

TABLINGS

National Assembly and National Council of Provinces

1. The Minister in The Presidency: National Planning Commission

 (a)    General Notice No 101 published in Government Gazette No 32928
    dated 2 February 2010: Publication of the Revised Green Paper on
    National Planning Commission.

COMMITTEE REPORTS

National Council of Provinces

Report of the Select Committee on Land and Environmental Affairs on the request for proposed withdrawal of declaration of a portion of land of the Lowveld National Botanical Garden (LNBG), dated 16 March 2010:

The request from the Minister of Water and Environmental Affairs for the exclusion of a portion of state land from the Lowveld National Botanical Gardens was referred to the Select Committee on Land and Environmental Affairs on 26 January 2010 for consideration and report.

In terms of section 34(2) of the National Environmental Management Act: Biodiversity Act (Act 10 of 2004), a part of a national botanical garden on state land may not be excluded from it except by resolution of both Houses of Parliament.

Having deliberated on the matter, the Select Committee on Land and Environmental Affairs recommends that the National Council of Provinces resolves to approve the request for the withdrawal of 1.47 ha of portion 30 (a portion of portion 14) of the farm Boschrand No.283-JT, of state land from the Lowveld National Botanical Gardens. The Committee would like the following to be noted:

The Committee was briefed by the officials of the Department of Water and Environmental Affairs on 16 March 2010 and deliberated on the matter. The following was raised:

The Committee took exception on two matters. Firstly, the department had already issued an Environmental Authorisation to proceed with the construction of the road without the necessary approval from both Houses of Parliament. The Committee further requested a full list of Interested and Affected Parties that were consulted during the public participation process, during the Environmental Impact Assessment as part of the requirements of the National Environmental Management Act (107 of 1998).

Although the Committee agreed to recommend approval of the request to de- proclaim the portion of the Lowveld Botanical Garden for construction of the N4/7 Ring Road, it wishes to record its disapproval in the process that was followed in this regard.

Report to be considered.

                       THURSDAY, 18 MARCH 2010

COMMITTEE REPORTS

National Council of Provinces

1. REPORT OF THE SELECT COMMITTEE ON CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS ON THE OVERSIGHT VISIT TO THABO MOFUTSANYANE DISTRICT MUNICIPALITY – DATED 12 MARCH 2010

2. Background and Overview 1.1 The Select Committee on Co-operative Governance and Traditional Affairs, having considered the request by the National Council of Provinces (NCOP) on 9th December 2009, to consider and report on the intervention notice invoked in terms of section 139 (1)(b) of the Constitution at Thabo Mofutsanyane District Municipality, reports as follows:

 1.2    In terms of section 139(1)(b), when a municipality cannot or
    does not fulfil an executive obligation in terms of the
    Constitution or legislation, the relevant provincial executive may
    intervene by taking any appropriate steps to ensure fulfilment of
    that obligation, including assuming responsibility for the relevant
    obligation in that municipality.

 1.3    In terms of NCOP rule 101, the Office of the Chairperson of the
    NCOP referred the notice of intervention in the affairs of Thabo
    Mofutsanyane District Municipality to the Select Committee on Co-
    operative Governance and Traditional Affairs for consideration and
    report. On 9th February 2010, the Select Committee took a decision
    during its meeting to conduct an oversight visit to the above-
    mentioned Municipality on 24 February 2010.

1. Purpose and Objectives of the Oversight Visit

 2.1    The main objectives of the oversight visit was to determine
    whether procedural requirements have been met and to verify whether
    the provincial executive has used its discretion appropriately
    before the Committee can approve/disapprove the interventions.
    Through the deliberations and interaction with internal and
    external stakeholders, the Committee wanted to determine how the
    provincial executive was intending to restore the fulfilment of the
    relevant obligations and ensure fulfilment in the long-term. The
    aim being to ensure intergovernmental checks and balances aimed at
    guarding the integrity and efficiency of the intervention process.
    In terms of section 139 (2)(b)(ii) of the Constitution, the
    intervention must end if the NCOP does not positively approve the
    intervention within 180 days, in this case before the end of 06
    June 2010 since the intervention began.

1. Composition of the Delegation

 3.1    The Delegation of the Committee composed of the following
    members of Parliament and Officials: Hon MH Mokgobi, Limpopo (ANC);
    Hon AG Matila, Gauteng (ANC); Hon DV Bloem, Free State (COPE); Hon
    A Watson, Mpumalanga (DA), Hon TMH Mofokeng, Free State, (ANC) Mr
    TM Manele, Committee Secretary (Committee Section); Mr N Mfuku,
    Content Adviser (Committee Section) and Mr V Mfuniselwa,
    Administration Assistant (Committee Section).

1. Introduction

 4.1    On the 4th December 2009 the Free State MEC for Co-operative
    Governance and Traditional Affairs tabled a notice of intervention
    in Thabo Mofutsanyane District Municipality to the Office of the
    Chairperson of the NCOP. Subsequent to the tabling, the notice of
    intervention was referred to the Select Committee on Co-operative
    Governance and Traditional Affairs for consideration and report in
    terms of Council Rule 101. In compliance with the Council referral,
    the Select Committee resolved to undertake a fact-finding visit to
    the Municipality on 24 February 2010.

1. Problems Identified by the PEC at the Municipality 5.1 The main issues identified by the PEC to intervene in the affairs of Thabo Mufutsanyane District Municipality related to the failure by the Municipality to service its local municipalities due to vacant Section 57 positions; failure by the Municipality to address current municipal financial and other administrative challenges confronting the Municipality and the Municipal Council’s inability to perform its executive obligation due to the failure of the Municipality to function properly. There is no compliance with current legislation; unspent 2008/09 MIG allocation (R13, 5 million); there is no dedicated Public Participation Officer and the District failed to co-operate with local municipalities and other stakeholders.

2. Oversight Visit to Thabo Mofutsanyane District Municipality

 6.1    On the 24 February 2010 the Delegation of the Committee had
     interactive and robust engagements with the internal and external
     stakeholder of the Thabo Mofutsanyane District Municipality. The
     main internal stakeholders the Delegation interacted with in the
     Municipality included the Speaker, Mayor, Chief Whip, Ward
     Committee Members, Councillors and the Administrator. The main
     external stakeholders the Delegation interacted with included
     members of the community and business forums and non-governmental
     organizations.

 6.2    For the purpose of this report, the submissions made by both
     internal and external stakeholders are structured based on the five
     key performance areas of the local government which are: Municipal
     Transformation; Basic Service Delivery; Local Economic Development;
     Municipal Financial Viability and Management as well as Good
     Governance and Public Participation. (A)   Municipal Transformation and Organisational Development

 6.3    Municipal Council: The submissions made by the Speaker, Mayor
     and the Chief Whip indicated that the Municipality welcomed the
     intervention in its affairs by the PEC. Some of the major progress
     reported by the Municipal Council since the appointment of the
     Administrator by the Provincial Department of Co-operative
     Governance and Traditional Affairs included the development of a
     turn-around strategy and municipal financial recovery plan; co-
     ordination and scheduling of meetings are done monthly and regular
     executive management meetings are being held fortnightly to
     identify and provide solutions to organisational problems.

 6.4    SALGA: The Association declared that what has happened in the
     past should serve as a lesson. The Municipality should devote its
     energy and resources towards the implementation of the turn-around
     strategy, in order to remedy the Municipality. SALGA registered its
     support to the Administrator, and appreciated the current efforts
     in the filling of vacant positions.

 6.5    Administrator: Some of the organisational development challenges
     indicated in the report of the administrator pertained to poor
     assessment of the recoverability of Regional Service Council (RSC)
     debtors and the lack of management oversight to implement
     procedures to recover outstanding amounts – which led to the
     Municipality handing over the amounts due to debt
     collectors/attorneys. Furthermore, the staff was not performing
     duties in terms of formal job descriptions and standard task lists;
     failure to provide supporting documentation and ineffective
     application of HR processes; lack of performance management system,
     non-implementation of the organisational training plan and
     monitoring of training costs and lack of monthly payroll payment
     reconciliation and review. There were instances of
     maladministration, non-compliance with statutory obligations and
     serious malpractice. This has resulted in poor staff morale.

 6.6    Some of the intervention activities reported by the
     Administrator in assisting the Municipality included: review and
     approval of job descriptions, documenting processes and policies,
     monitoring policy implementation, implementing performance
     management system, conducting skills audit for all posts and
     implementing a capacity-building plan and reconciliation of salary
     and third party payment and sub-system information. It was reported
     that Mr M Makhele of Setsoto Local Municipality has been seconded
     to the Municipality in order to provide capacity in the IDP Unit,
     and support the neighbouring local municipalities with alignment
     and development of credible IDPs. Since the Municipality failed to
     comply with Treasury Regulations, an amount of R5, 8 million of its
     equitable share was withheld. However, the amount was given back
     after numerous deputations to the National Treasury. The Labour
     Forum was inactive, however, it has since been revived and regular
     meetings have been conducted. It was reported that single isolated
     cases of disputes and grievances have been dealt with, whilst
     others have been referred to the CCMA.


 7. Organised Labour:  Some of the major transformation and
    organisational development issues raised by the Independent
    Municipal and Allied Trade Union (IMATU) related to lack of
    environmental health system and services. Since 01 July 2009 there
    environmental health function was not performed by the
    Municipality. It was reported that the allocated R10 million for
    environmental health by National Treasury has been used for other
    functions. Furthermore, there was non-implementation of Council
    decisions by the Municipal Manager; lack of organisational
    structure, lack of tools of trade and procurement of goods and lack
    of professional training. The salary disparity, was being done
    based on the old grading system. There were also serious challenges
    with respect to the filling of vacant positions of health
    professionals, lack of consultation on budget related services,
    lack of by-laws and legislation, non-functioning of the labour
    forum.

 6.8    IMATU expressed appreciation about the placing of the
     Municipality under section 139 (1)(b) of the Constitution and the
     subsequent appointment of the Administrator. Some of the progress
     reported by the representatives of the IMATU as a result of the
     intervention and appointment of the Administrator related to the
     resuscitation of the labour forum; training on computer systems;
     appointment of skills development facilitator and development of
     skills development plans.

 6.9    The South African Municipal Workers Union (SAMWU) raised major
     concerns related to the prevention of employees to attend skills
     development programmes; forceful resignation of employees; non-
     functionality of the labour forum; low staff morale and trust among
     employees, delay with regard to the appointment of section 57
     managers, and non implementation of the bursary policy. SAMWU
     reported that most of the departmental functions previously resided
     in the Municipal Manager’s office, for example, Finance and Fleet
     Management. Despite the above concerns, SAMWU welcomed the placing
     of the Municipality under section 139 (1)(b) of the Constitution.
     Some of the progress reported in respect of the intervention and
     the appointment of the Administrator related to the development of
     the organisational structure and management’s open door policy.
     The representative of the union further proposed that the
     Administrator fast-track the appointment of Section 57 Managers. (B)   Basic Service Delivery

 6.10   Administrator: Some of the basic service delivery problems
     highlighted by the Administrator included lack of reconciliation of
     Municipal Infrastructure Grant (MIG) projects expenditure for
     previous years, inadequate public participation and support of
     local municipalities by the District Municipality and provision of
     service delivery not in accordance with the approved IDP. It was
     further indicated that the MIG balance as at 22 February 2010 of
     R7, 2 million will be spent accordingly and the projects will be
     completed by March 2010.  Other intervention activities reported in
     order to assist the Municipality to deal with service delivery
     problems included improvement of communication between district,
     local municipalities and the community and ensuring that there was
     a dedicated Public Participation Officer to liaise with local
     municipalities.

(C) Local Economic Development (LED)

 6.11   Administrator: The Administrator declared that previously there
     was an acute shortage of personnel in the LED component, hence it
     was critical to get external support whilst there was a process of
     appointing relevant personnel in this component. Progress is
     anticipated with the assistance of the Independent Development Co-
     operation (IDC) in terms of establishing a Development Agency which
     is likely to be catalytic in LED projects. Furthermore, IDT and
     ABSA have been engaged on the alignment and the review of the
     District LED Strategy.

 6.12   Members of Community Forums: The gist of inputs emanating from
     these stakeholders with respect to LED related to lack of access to
     land and provision of title deeds, in order to participate in LED
     projects.

(D) Municipal Financial Viability and Management

 6.13   Administrator: It has been identified that there are weak
     procurement controls, non-compliance with procurement policies and
     legislation, lack of reporting regarding procurement and policy
     implementation in the Municipality. The Auditor-General has
     identified fruitless and wasteful expenditure for two consecutive
     financial years. An action plan has since been developed to address
     the issues raised by the Auditor-General and is being implemented.
     The Administrator has also updated policies and installed on-line
     SCM module; enforced compliance reporting and developed additional
     procurement reporting templates for stakeholders. In addition, the
     current budget has been reviewed in order to identify and realise
     cost saving opportunities and develop a financial recovery plan.
     Assistance to address the Auditor-General queries and funding to
     deal with poverty alleviation projects and legal creditors has been
     provided by the Provincial Department of Co-operative Governance
     and Traditional Affairs.

 6.14   The Administrator reported that the Office of the Premier (State
     Law Advisor) has been tirelessly providing support to the
     Municipality regarding the outstanding litigation and legal costs
     with the creditors. This relates to the R50 million that was
     supposed to have been collected by debt collectors on behalf of the
     Municipality, but unceremoniously it has been discovered that the
     Municipality owes the debt collectors more than R9, 8 million and
     more than R15 million has been paid since 2007. (E)   Good Governance and Public Participation

 6.15   Administrator: Governance problems reported by the Administrator
     related to the non-functionality of Audit Committees since 2008;
     lack of risk assessment; monitoring and control system; poor
     communication of risk management issues through municipal formal
     structures and a lack of fraud prevention plan. In order to improve
     and facilitate good governance and public participation, there is
     an urgent need to appoint and/or transfer a Public Participation
     Officer internally that will also assist the Speaker’s Officer. The
     Officer will be appointed as from 01 March 2010. In addition to
     this, the Administrator was assisting the Municipality to deal with
     governance challenges including the updating of internal audit and
     risk management policies and plans, monitoring of the
     implementation of policy and plans and ensuring the effective
     oversight function of the Audit Committee.

 6.16   Ward Committees: The Ward Committees declared their
     dissatisfaction with regard to poor consultation and communication
     on the application of section 139 (1)(b) of the Constitution on the
     Municipality, non consultation with other municipalities on the
     application of the intervention in the District. They proposed that
     the community should be provided with regular and deliberate
     feedback on progress made in respect of intervention.

1. Committee Observations and Opinion 7.1 The Delegation of the Committee has observed that the Municipality has failed to ensure mid year financial review in consultation with the district and local municipality, failed to ensure the appointment of section 57 managers as indicated in the report and the Council has been unable to collect revenue owed since 2006 stoppage of levies. It was observed that the process of collecting outstanding RSC levies has been tedious. The amount that was suppose to be collected was estimated to be in the region of R50 million.

7.2     Furthermore, the changing of debt collectors with regard to the
     collection of outstanding RSC levies has not assisted the
     Municipality. The amount of R9, 8 million owed to the debt
     collectors was unjustified. The Municipality had failed to comply
     with national legislative requirements and consequently contributed
     to the evoking of section 139 (1)(b) of the Constitution. There was
     also poor communication with the community on the objectives of
     intervening in the Municipality.

1. Acknowledgement

8.1     The Committee Delegation acknowledged the varied contributions
     of the parliamentary staff who participated in the oversight visit
     in their various capacities.  A word of appreciation is also
     extended to all the internal and external stakeholders of the
     municipality who interacted and had robust engagements with the
     delegation of the committee on matters related to the placement of
     the municipality under section 139 (1) (b) of the Constitution.

1. Recommendations

9.1     Having conducted the oversight visit to the Thabo Mufutsanyane
     District Municipality and interacted with internal and external
     stakeholders, the Select Committee on Co-operative Governance and
     Traditional Affairs recommends that:
    9.1.1    The National Council of Provinces approves the
         intervention as issued by the Provincial Executive Council in
         terms of section 139 (1)(b) of the Constitution.


    9.1.2    The Administrator should fast-tract the process of
         appointing Section 57 Managers and assist the Municipality in
         developing a labour retention strategy in order to ensure that
         future service delivery projects have the support of the
         community and are aligned with IDP.


    9.1.3    The Administrator should conduct a proper and thorough
         investigation and report to the Free State MEC of Co-operative
         Governance and Traditional Affairs and the NCOP on the
         possible link between the resignation of the former Municipal
         Manager and any other form of misconduct that has since
         contributed to the current crisis in the Municipality.


    9.1.4    The Select Committee on Co-operative Governance and
         Traditional Affairs would summon the former Municipal Manager
         of Thabo Mofutsanyane District Municipality, accompanied by
         the MEC, to appear before it in order to explain and give
         details on the allegations of maladministration and
         misappropriation of funds during his term as Municipal Manager
         of Thabo Mofutsanyane District Municipality.


    9.1.5    The Minister for Co-operative Governance and Traditional
         Affairs should institute an independent forensic investigation
         into all the financial affairs of the Thabo Mofutsanyane
         District Municipality.


    9.1.6    The Administrator should also conduct a proper and
         meticulous reconciliation of payments on the litigation and
         legal costs of its debt collectors and attorneys. This will
         enable the Municipality to avoid fruitless and wasteful
         expenditure.


    9.1.7    The Free State MEC for Co-operative Governance and
         Traditional Affairs should table quarterly progress reports to
         the NCOP and the Free State Provincial Legislature on the
         status of the intervention in the Municipality, including
         challenges encountered.


    9.1.8    The South African Local Government Association in co-
         operation with Local Government Sector Education and Training
         Authority should facilitate training and capacity building for
         Municipal Councillors; to further deepen their understanding
         of the oversight role; legal framework and policies that
         govern the activities of the Municipality from the date the
         recommendations are adopted by the NCOP.


    9.1.9    The South African Local Government Association should also
         facilitate Executive Training Programmes for the municipal
         officials.

    9.1.10   The NCOP should approve the establishment of a Unit in
          Parliament that would track the implementation of resolutions
          adopted by the Select Committee on Co-operative Governance
          and Traditional Affairs.
    9.1.11   The approved report by the NCOP should be shared with all
          the internal and external stakeholders of the Thabo
          Mufutsanyane District Municipality whom the Committee
          Delegation interacted with during the oversight visit.
      12. The Select Committee on Co-operative Governance and
          Traditional Affairs in co-operation with the relevant
          Portfolio Committee in the Free State Provincial Legislature
          should conduct a follow-up visit to the Municipality, three
          months after the intervention has ended in order to monitor
          through interaction with internal and external stakeholders
          progress made in respect of the intervention in the
          Municipality.


      13. The National Department of Co-operative Governance and
          Traditional Affairs should introduce legislation to regulate
          the implementation of section 100 and 139 of the
          Constitution, including the processes established by these
          sections.

Report to be considered.

1. REPORT OF THE SELECT COMMITTEE ON CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS ON THE OVERSIGHT VISIT TO NALA LOCAL MUNICIPALITY: DATED 12 MARCH 2010

2. Background and Overview

 1.1    The Select Committee on Co-operative Governance and Traditional
     Affairs having considered the request by the National Council of
     Provinces (NCOP) on 11th January 2010, to consider and report on
     the intervention notice in terms of section 139 (1)(b) of the
     Constitution at Nala Local Municipality, reports as follows:

 1.2    In terms of section 139(1)(b), when a municipality cannot or
     does not fulfil an executive obligation in terms of the
     Constitution or legislation, the relevant provincial executive may
     intervene by taking any appropriate steps to ensure fulfilment of
     that obligation, including assuming responsibility for the relevant
     obligation in that municipality.

 1.3    In terms of NCOP rule 101, the Office of the Chairperson of the
     NCOP referred the notice of intervention in the affairs of the Nala
     Local Municipality to the Select Committee on Co-operative
     Governance and Traditional Affairs for consideration and report. On
     9th February 2010, the Select Committee took a decision during its
     meeting to conduct an oversight visit to the above-mentioned
     Municipality on the 25th February 2010.

1. Purpose and Objectives of the Oversight Visit

 2.1    The main objectives of the oversight visit was to determine
    whether procedural requirements have been met and to verify whether
    the provincial executive has used its discretion appropriately
    before the Committee can approve/disapprove the interventions.
    Through the deliberations and interaction with internal and
    external stakeholders, the Committee wanted to determine how the
    provincial executive was intending to restore the fulfilment of the
    relevant obligations and ensure fulfilment in the long-term. The
    aim being to ensure intergovernmental checks and balances aimed at
    guarding the integrity and efficiency of the intervention process.
    In terms of section 139 (2)(b)(ii) of the Constitution, the
    intervention must end if the NCOP does not positively approve the
    intervention within 180 days, in this case before the end of 09
    July 2010 since the intervention began.

1. Composition of the Delegation 3.1 The Delegation of the Committee composed of the following members of Parliament and Officials: Hon MH Mokgobi, Limpopo (ANC); Hon AG Matila, Gauteng (ANC); Hon DV Bloem, Free State (COPE); Hon A Watson, Mpumalanga (DA), Mr TM Manele, Committee Secretary (Committee Section); Mr N Mfuku, Content Adviser (Committee Section) and Mr V Mfuniselwa, Administration Assistant (Committee Section).

2. Introduction

 4.1    On the 8th December 2009 the Free State MEC for the Co-operative
     Governance and Traditional Affairs tabled a notice of intervention
     in Nala Local Municipality to the Office of the Chairperson of the
     NCOP. Subsequent to the tabling, a notice of intervention was
     referred to the Select Committee on Co-operative Governance and
     Traditional Affairs for consideration and reporting in accordance
     with Rule 101. In compliance with the Council referral, the Select
     Committee resolved to undertake a fact-finding visit to the
     Municipality on 25th February 2010.

1. Problems Identified by the PEC at the Municipality

 5.1    The main thrust of issues identified by the PEC to intervene in
    the administrative affairs of the Nala Local Municipality related
    to the failure to comply with Municipal Systems Act by submitting
    section 46 reports for two consecutive years; failure to adopt and
    submit the annual performance reports for 2005/06, 2006/07 and
    2007/08; failure to develop and adopt a Performance Management
    Framework to regulate staff performance;  absence of performance
    agreement between the Mayor and the Municipal Manager; failure to
    formally approve the performance management system, failure to co-
    ordinate Integrated Development Planning (IDP) processes and
    appoint the IDP manager and the inability to spend Municipal
    Infrastructure Grant (MIG) funds. The overall financial management
    of the Municipality is in disarray, given the inability of the
    Auditor-General to access documentation for audit purposes.


 5.2    In terms of the notice of intervention the final decision taken
    by the Executive Council to intervene in the administrative affairs
    of the Nala Local Municipality was conveyed not only to the
    National Council of Provinces but also to the Minister of Co-
    operative Governance and Traditional Affairs, the Provincial
    Legislature, Municipal Council and the Administrator.

1. Oversight Visit to Nala Local Municipality

 6.1    On the 25th February 2010 the Delegation of the Committee had
    interactive and robust engagements with the internal and external
    stakeholder of the Nala Local Municipality. The main internal
    stakeholders the Delegation interacted with in the municipality
    included the Speaker, Mayor, Chief Whip, Ward Committee Members and
    Councillors and the Administrator and Organized labour. The main
    external stakeholders the Delegation interacted with included
    members of the community forums and non- governmental
    organizations.

 6.2    For the purpose of this report, the submissions made by both
    internal and external stakeholders are structured based on the five
    key performance areas of the local government which are: Municipal
    Transformation; Basic Service Delivery; Local Economic Development;
    Municipal Financial Viability and Management as well as Good
    Governance and Public Participation.

(A) Municipal Transformation and Organisational Development

 6.3    Municipal Council: The submissions made by the Mayor, Speaker
    and Chief Whip indicated that the Municipality welcomed the
    intervention in terms of section 139 (1)(b) of the Constitution and
    the subsequent appointment of the Administrator by the MEC for Co-
    operative Governance Traditional Affairs.

 6.4    Administrator: The major transformation and organisational
    development problems reported by the administrator pertained to
    non-compliance with regard to submission of section 46 reports in
    terms of the requirement of the Municipal Systems Act, non-
    adoption and failure to submit the 2005/06 until 2007/08 annual
    performance reports by the Council.  However, the major progress
    reported by the Administrator in respect of municipal
    transformation and organisational development related to
    development and adoption by the Municipal Council of the
    implementation of a turn-around strategic action plan; a financial
    recovery and revenue enhancement strategy; implementation of a
    financial system and finalising the staff placement processes.

 6.5    Organised Labour: The concerns raised by organized labour
    through the representatives of the Independent Municipal and Allied
    Trade Union (IMATU) pertained to non–implementation of municipal
    placement policy; misuse of municipal overtime, inconsistent
    application of disciplinary procedures; failure to re-instate
    employees who have won CCMA  arbitration awards; non-payment of
    13th cheques to some of the junior employees; duplication of posts;
    interviews conducted without consultation and participation of the
    union representatives and delays with regard to the appointment of
    forensic investigations and appointment of security officers with
    criminal records.

 6.6    The South African Municipal Workers Union (SAMWU) expressed its
    dissatisfaction regarding the re-appointment of the former CFO Mr D
    Shongwe as the Municipal Manager. It is alleged that he contributed
    to the current crisis of the Municipality. It was brought to the
    attention of the Delegation that there are 40 employees who have
    been previously employed by the previous Municipal Council, but
    currently redundant. Currently those employees have no job
    descriptions and office space.

(B) Basic Service Delivery

 7. Administrator:  Key service delivery problems reported by the
    Administrator related to non compliance with the Municipal Systems
    Act and failure to adopt the annual performance reports for
    2005/06, 2006/07 and 2007/08 financial years.  The administrator
    indicated that these reports have subsequently been processed and
    discussed at Council as demanded by legislation. The only challenge
    was that these reports did not follow the guidelines of Circular 11
    on Annual Report issued by National Treasury that prescribe that
    the Annual Report should contain the Annual Financial Statements
    (AFS),  the Auditor General’s  Report on AFS, any recommendations
    of the Audit Committee, and a report on the performance of the
    municipality. The Administrator further reported that progress has
    been made with regard to the development and implementation of the
    service delivery plan for the Municipality.

 8. It was reported that the Municipality previously was unable to
    spend its MIG funds, however, the matter is urgently receiving
    attention with the assistance of the Provincial Project Management
    Unit. The Provincial Department has also dispatched a senior
    engineer that will assist the Municipality in fast-tracking
    implementation of infrastructure projects, and providing technical
    advice on corresponding operations and maintenance.

 6.9    Chamber of Commerce: The Chairperson of the Chamber reported
    service delivery problems which started since 2007. The Chamber
    wanted approval to repair the town hall, but received no co-
    operation from the Municipality. However, since the arrival of the
    Administrator, good relations have been observed. Furthermore,
    annual electricity tariffs were discussed with all stakeholders,
    and so far, four meetings were held already this year.

 6.10   Business Forum: The service delivery concerns echoed by the
    representatives of the Maize Capital Ratepayers Association related
    to the collapse of city hall and dumping sites; lack of sewerage
    infrastructure; lack of budget on electrical and water reticulation
    infrastructural maintenance; unlawful implementation of electrical
    tariff increases; shocking state of road-works and maintenance of
    tarred roads; inadequate state of parks and the irregular
    collection of refuse and garden removals.

(C) Local Economic Development (LED)

 6.11.  Members of Community Forums: The concerns raised by the
     stakeholders pertained to lack of business opportunities, lack  of
     job opportunities, lack of access to land, lack of equity in the
     awarding of municipal tenders, and lack of economic financial
     support to small businesses and non-functionality of Unit in the
     Municipality.
 6.12   Administrator: It was indicated that the LED Manager’s position
     was vacant and the Municipality did not have an LED strategy. Since
     then the matter is receiving the attention of the EXCO
     Representative. However, in the meantime the municipality is
     actively participating in the development of Lejweleputswa District
     Growth and Development Strategy in partnership with the Presidency.
     The economic development intelligence gathered will be used in the
     development of the LED Strategy for the Municipality.

(D) Municipal Financial Viability and Management

 6.13   Administrator: Some of the Municipality’s financial viability
     and management problems reported by the Administrator pertained to
     the inability to provide quarterly reports in compliance with MFMA,
     and the inability of the Auditor-General to access documentation
     for audit purposes. Progress achieved to date related to the grant
     funding obtained from the Development Bank of Southern Africa
     (DBSA) to develop appropriate systems in order to embed a revenue
     enhancement strategy of the Municipality. A draft Service Level
     Agreement (SLA) has been developed and will be concluded during the
     week of the 26 February 2010.




 6.14   With a financial grant of R1 million, Dinatla Advisory Services
     has been enlisted to provide CFO support at the Nala Local
     Municipality for the next six months and they have developed the
     Mid-Year Budget and Performance Assessment Review Report; Developed
     Budgets Related Policies (Investment, Banking, Internal Controls,
     Adjustment budget, Reconciliation of Government Debts); Auditing of
     current files to lay a solid foundation for the upcoming Audit;
     developed a lay-out of asset register etc. The Municipality has
     specifically developed a draft adjustment budget; monthly reports
     (section 71, MSIG) done and informed by available information; and
     internal control and payment manual that is en-route to the
     Municipal Council for adoption has also been developed.

 6.15   Organized Labour: Some of the major financial viability and
     management concerns raised by the representatives of SAMWU related
     to stealing of computers, electrical appliances, petrol cards,
     misuse of municipal property and cars and fraud.

(E) Good Governance and Public Participation

 6.16   Administrator: Some of the major progress reported by the
     Administrator in respect of good governance and public
     participation included the recent suspension of the Municipal
     Manager and the appointment of a non-section 56 Manager as the
     Acting Municipal Manager. At an ordinary Council meeting held on 04
     February 2010, the Council resolved to lift the suspension of the
     Municipal Manager with immediate effect. This was done because the
     Council contravened a number of rules on agenda of Council meetings
     and processes to be followed in activating a precautionary
     suspension.

 6.17   Organized Labour: The major institutional governance concern
    raised by the representatives of both IMATU and SAMWU pertained to
    the non-functionality of labour forum, lack of skills development
    plans and capacity building programmes for the employees. 7.    Committee Observations and Opinion

 7.1    The Delegation of the Committee is of the opinion that the
     organisational capacity of the Municipality to perform its
     functions and fulfil its developmental role is of paramount
     importance for service delivery. This key performance area should
     focus on appointment of section 57 managers, development and
     implementation of performance management system and agreements,
     submission of municipal infrastructure grants plans with proper
     cashflows, and development, adoption and implementation of local
     economic development strategy.

1. Acknowledgement

 8.1    The Committee Delegation acknowledged the varied contributions
     of the parliamentary staff who participated in the oversight visit
     in their various capacities.  A word of appreciation is also
     extended to all the internal and external stakeholders of the
     Municipality who interacted and had robust engagements with the
     Delegation of the Committee on matters related to the placement of
     the municipality under section 139 (1)(b) of the Constitution.

1. Recommendations

 9.1    Having conducted the oversight visit to the Nala Local
     Municipality and interacted with internal and external
     stakeholders, the Select Committee on Co-operative Governance and
     Traditional Affairs recommends that:

     9.1.1   The National Council of Provinces approves the
           intervention as issued by the Provincial Executive Council
           in terms of section 139 (1)(b) of the Constitution.
     9.1.2   The Administrator should fast tract the process of
           appointing section 57 Managers and assist the Municipality
           in developing a labour retention strategy so as to ensure
           that future service delivery projects have the support of
           the community and are aligned with IDP.


     9.1.3   The Administrator should conduct a proper and thorough
           investigation and report to the Free State MEC of Co-
           operative Governance and Traditional Affairs and the NCOP,
           on all alleged cases of misappropriation of funds in the
           Municipality.


     9.1.4   The Free State MEC of Co-operative Governance and
           Traditional Affairs to immediately reconsider the current
           appointment of the Municipal Manager, since the appointment
           is surrounded by serious allegations of corruption and
           maladministration.


     9.1.5   The Administrator should ensure that the individual
           reported case to South African Polices Services is changed
           and made a municipal case.


     9.1.6   The Free State MEC for Co-operative Governance and
           Traditional Affairs should table quarterly progress reports
           to the NCOP and the Free State Provincial Legislature on the
           status of the intervention in the Municipality; including
           challenges encountered.


     9.1.7   The South African Local Government Association in co-
           operation with Local Government Sector Education and
           Training Authority should facilitate training and capacity
           building for Municipal Councillors; to further deepen their
           understanding of the oversight role; legal framework and
           policies that govern the activities of the Municipality from
           the date the recommendations are adopted by the NCOP.


     9.1.8   The South African Local Government Association should also
           facilitate Executive Training Programmes for municipal
           officials.

     9.1.9   The Minister for Co-operative Governance and Traditional
           Affairs should institute an independent forensic
           investigation into all the financial affairs of the Nala
           Local Municipality, including the companies doing business
           with the Municipality in order to detect ghost companies.

    9.1.10   The NCOP should approve the establishment of a Unit in
           Parliament that would track the implementation of
           resolutions adopted by the Select Committee on Co-operative
           Governance and Traditional Affairs.

    9.1.11   The approved report by the NCOP should be shared with all
           the internal and external stakeholders of the Nala Local
           Municipality whom the Committee Delegation interacted with
           during the oversight visit.

       12. The Select Committee on Co-operative Governance and
           Traditional Affairs in co-operation with the relevant
           Portfolio Committee in Free State Provincial Legislature
           should conduct a follow-up visit to the Municipality, three
           months after the intervention has ended in order to monitor
           through interaction with internal and external stakeholders
           progress made in respect of the intervention in the
           Municipality.


       13. The National Department of Co-operative Governance and
           Traditional Affairs should introduce legislation to regulate
           the implementation of section 100 and 139 of the
           Constitution, including the processes established by these
           sections.

Report to be considered.

                       TUESDAY, 23 MARCH 2010

ANNOUNCEMENTS

National Assembly and National Council of Provinces

The Speaker and the Chairperson

1 Classification of Bills by Joint Tagging Mechanism (JTM)

(1)    The JTM in terms of Joint Rule 160(6) classified the following
     Bills as section 75 Bills:

      a) Protection of Information Bill [B 6 – 2010] (National Assembly
         – sec 75).

      b) Prevention and Combating of Trafficking in Persons Bill [B 7 –
         2010] (National Assembly – sec 75).

National Council of Provinces

The Chairperson

1. Letter from Minister of Justice and Constitutional Development on withdrawal of regulations

(a)     The Chairperson of the National Council of Provinces received a
    letter from the Minister of Justice and Constitutional Development,
    withdrawing the tabling of regulations made in terms of section
    97(1) of the Child Justice Act, 2008 (Act No 75 of 2008).


    Referred to the Select Committee on Security and Constitutional
    Development for consideration.

TABLINGS

National Assembly and National Council of Provinces

1. The Minister of Trade and Industry

 (a)    Report of the Consumer Affairs Committee (CAFCOM) for 2008-09.

1. The Minister of Justice and Constitutional Development

 (a)    Report and Financial Statements of the Council for Debt
     Collectors for 2008-09, including the Report of the Independent
     Auditors on the Financial Statements and Performance Information
     for 2008-09.


 (b)    Register of Debt Collectors in terms of section 12(1)(a) of the
     Debt Collectors Act, 1998 (Act No 114 of 1998).

1. The Minister of Communications

 a) Strategic Plan of the Independent Communications Authority of South
    Africa (ICASA) for 2010/11.

National Council of Provinces

1. The Chairperson

 (a)    Regulations relating to child justice in compliance with section
     97(2) of the Child Justice Act, 2008 (Act 75 of 2008).


 Referred to the Select Committee on Security and Constitutional
 Development for consideration and report.


                      WEDNESDAY, 24 MARCH 2010 TABLINGS

National Assembly and National Council of Provinces

1. The Minister of Trade and Industry

(a)     General Notice No 40 published in Government Gazette No 32877
    dated 18 January 2010:  Notice of withdrawal in terms of section 12
    (6) (b):  Notice 1762, in terms of the Consumer Affairs (Unfair
    Business Practices) Act, 1988 (Act No 71 of 1988).

(b)     General Notice No 41 published in Government Gazette No 32878
    dated 18 January 2010:  2010 Soccer World Cup Liquor Policy, in
    terms of the Second 2010 FIFA World Cup South Africa Special
    Measures Act, 2006 (Act No 12 of 2006).


(c)     Government Notice No R.16 published in Government Gazette No
    32891 dated 3 February 2010:  Regulations relating to the
    registration of persons in control of any activity with regard to
    controlled goods or who have controlled goods in their possession
    or custody or under their control, in terms of the Non-
    Proliferation of Weapons of Mass Destruction Act, 1993 (Act No 87
    of 1993).


(d)     Government Notice No R.17 published in Government Gazette No
    32892 dated 3 February 2010:  Regulations regarding the application
    of provisions of  the Chemical Weapons Convention, in terms of the
    Non-Proliferation of Weapons of Mass Destruction Act, 1993 (Act No
    87 of 1993).


(e)     Government Notice No 18 published in Government Gazette No
    32893 dated 3 February 2010:  Declaration of certain chemical goods
    as controlled goods and control measures applicable to such goods,
    in terms of the Non-Proliferation of Weapons of Mass Destruction
    Act, 1993 (Act No 87 of 1993).


(f)     Government Notice No 19 published in Government Gazette No
    32894 dated 3 February 2010:  Declaration of certain biological
    goods and technologies as controlled goods and control measures
    applicable to such goods, in terms of the Non-Proliferation of
    Weapons of Mass Destruction Act, 1993 (Act No 87 of 1993).


(g)     Government Notice No 20 published in Government Gazette No
    32895 dated 3 February 2010:  Declaration of certain nuclear-
    related dual-use equipment, material and software and related
    technology as controlled goods, and control measures applicable to
    such goods, in terms of the Non-Proliferation of Weapons of Mass
    Destruction Act, 1993 (Act No 87 of 1993).


(h)     Government Notice No 21 published in Government Gazette No
    32896 dated 03 February 2010:  Additional declaration of certain
    nuclear-related dual-use equipment, materials and software and
    related technology as controlled goods, and control measures
    applicable to such goods, in terms of the Non-Proliferation of
    Weapons of Mass Destruction Act, 1993 (Act No 87 of 1993).


(i)     Government Notice No 22 published in Government Gazette No
    32897 dated 3 February 2010:  Declaration of certain missile
    technology and related items as controlled goods and control
    measures applicable to such goods, in terms of the Non-
    Proliferation of Weapons of Mass Destruction Act, 1993 (Act No 87
    of 1993).


(j)     General Notice No 95 published in Government Gazette No 32916
    dated 5 February 2010:  Regulations, in terms of the National
    Regulator for Compulsory Specifications Act, 2008 (Act No 5 of
    2008).


(k)     General Notice No 96 published in Government Gazette No 32916
    dated 5 February 2010:  Amendment to the Compulsory Specification
    for Motor Vehicles of Category 03/04, in terms of the National
    Regulator for Compulsory Specifications Act, 2008 (Act No 5 of
    2008).


(l)     General Notice No 97 published in Government Gazette No 32916
    dated 5 February 2010:  Amendment to the Compulsory Specification
    for Motor Vehicles of Category 01/02, in terms of the National
    Regulator for Compulsory Specifications Act, 2008 (Act No 5 of
    2008).


(m)     General Notice No 167 published in Government Gazette No 32988
    dated 26 February 2010:  Southern African Institute of Government
    Auditors:  Accounting officers–profession whose members qualify in
    terms of section 60of the Act, in terms of the Close Corporations
    Act, 1984 (Act No 69 of 1984).

1. The Minister of Public Works

(a)     Strategic Plan of the Department of Public Works for 2010 –
    2013.
(b)     Strategic Plan of the Agrément South Africa for 2010/11 –
    2012/13.

COMMITTEE REPORTS

National Council of Provinces

CREDA INSERT - T100324e-insert1 –PAGES 676 -706

                       THURSDAY, 25 MARCH 2010

ANNOUNCEMENTS

National Assembly and National Council of Provinces

The Speaker and the Chairperson

1. Bills passed by Houses – to be submitted to President for assent

(1)    Bills passed by National Council of Provinces on 25 March 2010:


      a) Division of Revenue Bill [B 4 – 2010] (National Assembly – sec
         76).


      b) Safety at Sports and Recreational Events Bill [B 7B – 2009]
         (National Assembly – sec 75).

TABLINGS

National Assembly and National Council of Provinces

1. The Minister of Public Works

 a) Strategic Plan of the Construction Industry Development Board for
    2010/11- 2012/13.

 b) Business Plan of the Council for the Built Environment for 2010-
    2013.

 c) Strategic Plan of the Independent Development Trust for 2010/11-
    2013.