I now call upon the Minister of Education. I'm sorry. It's the Minister of Finance. [Laughter.]
Minister, I am sorry that you couldn't vote. I could see that you wanted to vote, but you couldn't vote.
Chairperson, I felt very deprived at not being able to vote, as though democracy hadn't arrived in my life. But, thank you very much.
On 28 March, the NCOP adopted the 2006 Division of Revenue Bill in Kuruman during its initiative of taking Parliament to the people. We refer to that occasion because the Division of Revenue Bill is not only a concrete expression of co-operative relations between our three spheres of government, but it also establishes an important link between the national Appropriation Bill we are debating today, and the provincial budgets.
The House will recall that Schedule 1 of the Division of Revenue Bill sets out the share of nationally raised revenue of each tier of government. It is not a mistake that the Schedule shows conditional grants to provinces as part of the national share. Strictly speaking, conditional grants are national money. The same conditional grants get appropriated on national and provincial Votes of the relevant departments.
In the 2006 Medium-Term Expenditure Framework, R85 billion is allocated to provinces in the form of conditional grants. Of this amount, R32 billion is allocated to Health for a range of programmes, including the training of various health professionals, for tertiary health services; R23 billion is for low-cost housing; R15 billion has been allocated via the Treasury Vote for stepping up general infrastructure programmes in Education, Health, Roads and Agriculture; R7 billion is for transport infrastructure, including the Gautrain; R5,8 billion is for Education, the school nutrition programme and the recapitalisation of further education and training colleges; and R1,3 billion is for agricultural programmes such as farmer support for emerging farmers under the umbrella of the comprehensive agricultural support programme.
The programmes that we are funding through earmarked national allocations, that is, conditional grants, are undoubtedly some of the priority programmes in our government's programme of action.
These programmes are at the heart of the progressive realisation of a better life for all. That is why we elected to fund them the way we do. That is why we have chosen to have joint responsibility for their oversight. This House, working closely with the provinces, has a duty to ensure that the outputs and outcomes of these programmes are realised. Failure in this regard is clearly not an option.
It is important that when we challenge each other to do better, we never lose sight of commending ourselves when we do well. The hearings of the Select Committee on Finance and the section 32 quarterly reports are commendable. They are a good example of what Parliament can do ... Yes, you may applaud. [Applause.] They are a good example of what Parliament can do within the legal framework and the information generated within our system of governance to exercise its legitimate oversight role.
The hon Ralane would agree that this process has come a long way to become what it is today. In the initial stages, we used to debate the accuracy or otherwise of the data contained in the reports. Some departments would even attempt to use the forum to ask for more money or ``to plead poverty'', to quote hon Ralane. In recent times, all participants have come to accept that the hearings are about accounting for the use of resources and performance. Hon Ralane and other members of the select committee, please keep up this good work. [Applause.]
I have taken the time to explain why it is important for the Appropriation Bill to be debated in this House, because I think it is important for us in the executives of both national and provincial governments to accept that we must be held accountable for the resources that Parliament allocates in the Division of Revenue Bill, and further appropriates in this Bill.
Thank you very much for your patience in listening to me. Again, congratulations to the NCOP and the select committee, in particular, for its efforts. Thank you. [Applause.]
Chairperson, Ministers of Finance and Transport, the crucial question for us today is the recognition that Africa and South Africa, in particular, has earned from the international community.
In the annual international survey of 2005, Gallop International declares that even though Africa is not the richest continent, it is nevertheless staunchly optimistic about its future. Africa has good reason to be cheerful. The economy of the continent has been performing appreciably well, with South Africa having experienced spectacular growth over the past few years.
Some of Africa's long-running conflicts, such as the war in the Democratic Republic of Congo, have ended. Significantly, in the person of Ellen Johnson-Sirleaf, Liberia has given Africa its first female head of state. Other commentators argue that although South Africa inherited a huge load of trouble from the disintegrating apartheid government, the ANC government has developed policies that have driven an impressive 90 straight months of growth in every aspect of life.
Since early 2000, the fiscus began to move into a more expansionary phase. This means that, in the first instance, there is more money for the programme of social grants, mainly for child support and pensions destined to go to about 10 million indigent people in a population of 47 million. According to our government, this is a modern-day Keynesian practice with a measure of Roosevelt's New Deal.
The government has voted R370 billion over the next three years. This will be devoted to Public Works, mainly infrastructure, to boost jobs, and create more demand that will spread more evenly. The government's longer- term aim is to raise the growth rate to 6% by 2010, and to halve unemployment and poverty by the year 2014.
International commentators such as The Economist have argued that our government has been refreshingly pragmatic in experimenting with a mix of solutions in different sectors of the economy. In a vital sense, therefore, the ANC is not an ordinary party. It faces no serious competition.
The economic intelligence unit were accused that with a budget deficit of this size, South Africa would easily be able to fund it with a mixture of foreign and domestic debt. More revealing, however, is the study carried out in December 2005 by the World Bank and our Department of Trade and Industry. Eight hundred private companies were asked about the investment climate in South Africa. The answer they gave was encouraging. When compared not only to African countries, but also economies like Malaysia, Brazil and Eastern Europe, South Africa looks good.
Firms say that local courts work well. Property rights are adequately protected. Power is relatively cheap. Tax rates are fairly low. Red tape is no worse than in other countries with similar per capita income. In addition, both South African firms surveyed find it easier to borrow. In any case, they do not have to call the bank that often. On average, they are more profitable than their counterparts in, say, Poland or Malaysia.
The early announcement of transfers by National Treasury to local government and municipalities is a fine demonstration of our continually evolving intergovernmental fiscal relations.
Other comparable countries have taken between 30 and 40 years to develop stable intergovernmental fiscal relations. South Africa's progress in this regard is most noteworthy.
With government finances now in order, the problem is not money, but the ability to spend. Many departments and municipalities underspent their investment budgets in South Africa because we have few qualified people to design and manage projects.
As elected representatives we have an overwhelming duty to focus not only on the national Budget, but also on the budgets of the nine provinces and the 283 municipalities. Elected representatives are expected to focus on outputs and outcomes to be delivered by all three spheres of government.
In order to provide the Freedom Charter with tangible legitimacy, members of this House must be committed to exercising their oversight responsibilities. The Select Committee on Finance will inspect intensely the following: the monthly reports of actual revenue and expenditure with regard to national revenue; quarterly reports of provincial treasuries; annual reports and strategic plans of national and provincial departments; reports of the Auditor-General and the media budgetary assessment reports of municipalities.
Moreover, an oversight responsibility calls for an examination of performance against measurable objectives. Reports submitted by departments and municipalities must not leave information to the imagination of the reader. Reports should provide details such as project names, location, type of structure, number of units, project duration, completion date and project costs.
The monitoring process adopted by departments and municipalities will also be interrogated. Raising questions and tabling of discussions on matters of importance in the NCOP are effective mechanisms for enhancing parliamentary democracy and for exercising oversight responsibilities.
Parliamentary questions are important instruments for monitoring the performance of national, provincial and municipal structures, and for providing an essential check on the activities of the various spheres of government.
It is expected of the NCOP members to employ this method of engaging national departments, provincial departments and municipalities. Questions are not arbitrarily selected by members, but must essentially dovetail with the oversight functions of the select committees.
Last year, 42 questions relating to provincial grants were submitted to eight national departments. The Select Committee on Finance prioritised the interrogation of provincial grants in terms of its key oversight functions. Through public hearings in the NCOP and the use of questions and replies in the NCOP and the legislatures, members ensure that regular inspection of budgets and expenditure occurs.
This active monitoring of budgets and expenditure at regular intervals would timeously assist in detecting expenditure that is at variance with approved plans of national and provincial departments and municipalities. Regular inspection of expenditure against an approved budget is essential to detect, for example, whether expenditure exceeded any approved limits.
This implies that national departments, provincial departments and municipalities must manage and adhere to the budgets. Any excess expenditure must be reported, and the necessary approval must be obtained to ascertain that such excesses are permissible. The reasons for the excess expenditure are extremely important, and must be included in motivations. The premise that no expenditure may be incurred unless budgeted for or unless necessary approval has been obtained still holds sway.
The Select Committee on Finance once again places on record its congratulations to the National Treasury of South Africa for fulfilling with distinction not only its constitutional responsibility, but also its mandate. The Select Committee on Finance recommends that the House approve the 2006 Appropriation Bill. [Applause.]
Debate concluded.
Bill agreed to in accordance with section 75 of the Constitution.