Department of Rural Development and Land Reform Budgetary Review and Recommendations Report

Meeting report

Opening Statement
The Chairperson thanked Members for their participation in the formal Ad Hoc Committee. The issue of land was a challenge as it was a commodity, which stayed finite. The matter would however be continued to be debated. The work of the Ad Hoc Committee had now been formally accepted by Parliament.ration. He suggested that the Committee deal with the BRRR section by section. The Committee agreed.

Mr K Mileham (DA) referred to the “Key Relevant Policy Focus Areas” on page 5 said that the Committee had expressed constitutionality concerns about the 1913 issue date.

 

Consideration of the Budgetary Review Recommendations and Report
The Chairperson placed the Budgetary Review and Recommendations Report (BRRR) before the Committee for conside

Mr M Swathe (DA) supported what Mr Mileham was saying.

The Chairperson asked Mr Mileham to clarify what he was saying.

Mr Mileham responded that the Committee should include in the BRRR under the aforementioned section a provision stating the following, “The Committee expressed concern that such provision would have to comply with the South African Constitution.”

Ms P Ngwenya-Mabila (ANC) said that there were two processes that members had been informed about. The first was for the opening of applications for those persons who had missed the cut off date. The second was the development of policy to address the issue of the San and Khoi. What was Mr Mileham saying?

The Chairperson reiterated that there were two processes. The first was for the reopening of the applications process for persons who had missed the deadline. It was in line with the Constitution. The second was about policy for persons who had lost land prior to 1913 i.e. the Khoi and San.  The point of constitutionality had been made. The issue was now to include a provision about the constitutionality of claims prior to 1913. He asked the DRDLR to comment.

Mr Mdu Shabane, Director-General, Department of Rural Development and Land Reform (DRDLR), stated that the Committee could state in the BRRR that such policy should be in line with the Constitution. There was no problem to include it in the BRRR. Any policy had to be in line with the Constitution.
 

The Committee agreed that such a provision could be included in the BRRR.

On page 13, Mr Mileham asked about the high vacancy rate of the DRDLR of 19.3% in senior management positions. The Committee could in the BRRR express its concern that 1 in every 5 senior management positions was vacant.

Mr Swathe felt that the point made was relevant.

Ms Ngwenya-Mabila suggested that the DRDLR should try to reduce the use of consultants and needed to recruit personnel to fill critical positions.

The Chairperson stated that Mr Shabane had highlighted the fact that the DRDLR had challenges regarding its capacity to develop policy. Perhaps the Committee should assist to find interventions to solve the problem in totality.

Mr Mileham suggested that the Committee could include in the BRRR that the Committee expressed its concern about the high vacancy rate of 19.5% of senior management and that the Committee recommended that the DRDLR seek to fill senior management positions by the end of 2014.

The Chairperson stated that concern differently, saying that the Committee observed the challenge of filling senior positions in the DRDLR. Hence, it was recommended that the DRDLR reduce its dependence on the use of consultants and urged them to fill vacant posts with skilled personnel.

Mr Mileham noted that Mr Shabane had also stated that the DRDLR had a high turnover rate. He said that the DRDLR should look at a staff retention policy.

The Chairperson agreed that staff retention was important. He asked the Committee Section to come up with a formulation to be included in the BRRR.

Ms H Matlanyane (ANC) on page 13 wished something to be included in the BRRR under paragraph 5.1.2 regarding the “state land administration and tenure reform branch”.

Mr Mileham asked whether the “state land administration and tenure reform branch” fell within the financial year under review.

Mr Shabane responded that in 2012/13 a decision had been taken to set up the state land administration and tenure reform branch. Approval for the branch had been provided in July/August 2013.

The Committee agreed that a provision referring to the state land administration and tenure reform branch be included in the BRRR.

On page 17, Mr Mileham referred to paragraph 6.6.2 in which it was stated that the DRDLR would make a submission to National Treasury for additional funding for the handling of new land restitution applications.
He found this to be a problem since the Minister of Finance had made a statement that there was no more funding available.

The Chairperson asked whether there were no exceptions when the Minister of Finance made a statement. A budget was not a bible and was not cast in stone.

The Committee could only note what the Minister of Finance had said. The DRDLR still had the intention to ask National Treasury for additional funding.

Mr Mileham was concerned that the Committee was going to pass legislation opening up the land restitution applications process again but that there was no funds available to finance the process.
 

Mr Swathe had similar concerns but said that funding would be found. The Committee could however highlight what it had observed.

The Chairperson asked whether the DRDLR agreed with estimated figures of R129bn and R179bn of the Regulatory Impact Assessment.

Mr Shabane said that the DRDLR had asked objective persons to come up with the estimates. He noted that Cabinet often made statements based on what the current economic conditions were. The Regulatory Impact Assessment did not take current economic conditions into account.

The Chairperson felt it best to include a provision to the effect that the Committee noted the Minister of Finance’s Medium Term Budget Statement.

The Committee agreed.

Mr Mileham referred to paragraph 6.8.2 on page 18 in and suggested a formulation to be included to the effect that the Committee urged the DRDLR to address the issue of urban tenure reform.

On page 19 in between paragraph 7.1.3 and paragraph 7.1.4, Mr Mileham wished to make an additional recommendation, that “No new claims would be accepted by the DRDLR until a funding mechanism was put in place”.

Ms Ngwenya-Mabila asked whether Mr Mileham was suggesting that the process not go on without funding.

Mr Swathe said that funding was needed before the process could start.

Ms November said that people were waiting for the opportunity to put in their land claims as President Zuma had made a proclamation in this regard.

Ms Ngwenya-Mabila noted that ongoing discussions were taking place between the DRDLR and National Treasury over the issue of funding.

Mr Mileham understood that people were anxious to put in their claims. He was concerned however that false expectations were being created. Where was the R179bn going to come from? Claims could not be submitted before a funding model was in place.

The Chairperson agreed that the issue of budget was important. The approach was to make decisions and thereafter find the funds. Expectations were there already, no new expectations were being created.

He suggested that the section of the BRRR be left as it was and that a finance model be set up.

Mr Swathe was concerned as to where the funding for new lodgements was to come from. When the amendment legislation on land restitution came into effect how was the process to be funded.

Mr Mileham clarified that he was not saying that the land restitution process should not be opened. What he was saying was that funding for it should be provided. The process should not commence until there was a funding model in place. It was irresponsible to set up the process for failure. R1.37bn was needed to set up the offices for the process alone.

The Chairperson said that government should be urged to find the money.

Ms Ngwenya-Mabila, Mr R Cebekhulu (IFP) and Ms Matlanyane felt that the section in question should be left as it was and that no new recommendation as Mr Mileham was proposing should be added. 

The Chairperson made a ruling that it seemed that the majority of the Committee was not in favour of Mr Mileham’s recommendation and hence it would not be included in the BRRR.

Ms Ngwenya-Mabila said that the fact that the DRDLR had obtained a unqualified audit report needed to be captured in the BRRR.

Mr Mileham responded that somewhere in the BRRR it did mention the unqualified audit report. He pointed out that the DRDLR had not met all its targets.

Mr Swathe suggested that the BBRR be left as it was and not include anything new regarding the unqualified audit report and the DRDLR’s performance.

The Committee agreed.

Throughout the BRRR as the Committee worked through each section grammatical and spelling changes were made where needed.

The Committee adopted the BRRR as amended.

Adoption of Committee Minutes
Minutes dated the 16 October 2013 was adopted, unamended.

Minutes dated the 23 October 2013 was adopted as amended after grammatical changes had been effected to it.

Mr Mileham referring to Committee Minutes dated 23 October 2013, asked when the Department of Rural Development and Land Reform (DRDLR) had written to National Treasury regarding the surplus of the Ingonyama Trust Board.

Mr Shabane stated that the DRDLR had written to National Treasury on 29 October 2013.

Mr Mileham responded that regarding the surplus of the Ingonyama Trust Board (ITB) there was a procedural irregularity. The surplus application should be made within the financial year.

Mr Thapelo Motspeneng, Acting Chief Financial Officer: DRDLR, explained that an application for the surplus could only be made after the audit was completed.

Mr Mileham stated that section 53 of the Public Finance Management Act (PFMA) required that application should be made in anticipation of the surplus ahead of time.

Ms P Ngwenya-Mabila (ANC) said that the issue of the ITB surplus had been raised in the Committee’s last meeting. Even though the ITB had a surplus they still had to comply with the PFMA. The Committee had requested the DRDLR to resolve the surplus issue.

The Chairperson added that the DRDLR had said that it would engage with the ITB to resolve the issue. The DRDLR had been given a week by the Committee to sort out the issue, which they had. The DRDLR had complied with the Committee’s request and had responded the day before the present meeting.

He noted that in order to accumulate a surplus, application to National Treasury needed to be made.

He made a ruling that the matter was as of now considered closed. Going forward it was important that there was compliance with the PFMA.

The meeting was adjourned.