House Chairperson, Mr Deputy President and hon members, section 214 of the Constitution of the Republic of South Africa requires that government ensures a transparent and equitable system to divide nationally raised revenue between the three spheres of government. The Division of Revenue Bill and its underlying allocations are the culmination of an extensive consultation process between all three spheres of government.
By setting the three-year allocations for the equitable shares and conditional grants for provinces and local government, the Division of Revenue Bill entrenches transparency and accountability in our governmental fiscal system. It allows all spheres of government to plan ahead and get down to the business of delivering services to the people.
The Division of Revenue Bill tabled in this House by the Minister of Finance on Budget day, 17 February this year, was, for the first time, processed in terms of the Money Bills Amendment Procedure and Related Matters Act, Act 9 of 2009, where a report was tabled with the 2010 Budget which explained how the division of revenue and national Budget give effect to, or the reasons for not taking into account the recommendations contained in the committee reports on the 2009 Medium-Term Budget Policy Statement. I am pleased to announce that the recommendations by the Standing Committee on Appropriations were taken into account when the 2010 Division of Revenue Bill was drafted.
This Division of Revenue Bill contains details on each grant, its purpose, criteria for allocating the grant and an account of the performance of each grant. Such information should contribute towards deepening parliamentary oversight over the executive.
It gives effect to the priorities articulated by the President in his state of the nation address on 11 February this year. These priorities are: Improving the quality of education, as we all know; upgrading health care; promoting public safety; supporting rural development; creating decent jobs; building sustainable human settlements; encouraging efficient local government; and combating corruption.
As government is shifting to target-based outcomes in order to increase efficiency and improve performance to support inclusive development, these priorities are unpacked in 12 measurable outcomes. Due to savings of R25,6 billion identified through shifting towards priorities, the budget framework allows us to provide an additional R112,2 billion in spending over the next three years in comparison with our spending plans from a year earlier. Of the additional resources, national departments will receive R56,2 billion or 50,1% of the additional resources; provinces R46 billion or 40,6%; and municipalities an additional R10,5 billion or 9,3% of this allocation. The largest growth in allocations is to local government where its share of the total available resource envelope increases from 7,3% in 2009-10 to 8,8% in the 2012-13 financial year.
Schedule 1 of the Bill - if I may just quickly go through the Bill itself - provides a summary of the allocation of funds to the three spheres of government. Of the R818,1 billion Budget for this year, national department functions amount to R527 billion. This includes debt service costs amounting to R71,4 billion and a contingency reserve of R6 billion. Provinces receive R261 billion and R30,2 billion is allocated to local government.
Schedule 2 presents provincial equitable shares and Schedule 3 allocates equitable shares to municipalities. Schedules 4 to 6 allocate conditional and other grants to provinces and local government. Schedule 7 allocates in- kind transfers to municipalities. Schedule 8 allocates incentives for provinces and municipalities to meet targets with regard to priority government programmes.
The Division of Revenue Bill provides for a substantial share of nationally collected revenue to go to provinces in order to strengthen social services programmes that have a great impact on human development, quality of life and social transformation. The increase over baseline for the next three years amounts to R45,6 billion. This is to sustain the social progress made in recent years, to meet government's broader developmental objectives and mitigate the effect of the current economic downturn. Including these revisions, allocations to provinces will amount to R322,9 billion in the 2010-11 financial year.
Members of this House need to be alerted to the fact that wage agreements of 2009 have placed pressure on provincial spending over the Medium-Term Expenditure Framework. Of the R33,9 billion added to the provincial equitable share, R30,9 billion is to cover the cost of general wage agreements and occupation-specific dispensation, OSD, agreements in health and education. While these additions should attract and retain experience and skills in the public sector, it is a substantial sum of money that does not necessarily translate into additional service-delivery outputs. We therefore cannot afford to continue expanding personnel expenditure, especially if we do not see a substantial improvement in the quality of service delivery from the public sector.
The President stressed in his state of the nation address that government will place education and skills development at the centre of its policies. A general adjustment of R3 billion over the MTEF is made to the provincial equitable share to cover health and education priorities. As in previous years, further investments are made to education to ensure that access and quality are improved.
Last year we announced that R500 million was added to the infrastructure grant for provinces to ensure that classroom space is available for Grade R learners entering the system. A further R1 billion was made available for schools to upgrade infrastructure, improve security and install libraries and laboratories. These improvements will become visible during this and next year.
R9 billion was added to the provincial equitable share to cover the cost of OSD agreements for educators and a further R1,2 billion was added to the FET colleges grant for OSD for lecturers. The future of this country depends on these additions being converted into improved teaching and learning at our schools. Collectively we have a responsibility to ensure that this happens.
In health, R3,9 billion is added to the provincial equitable share to cover the OSD agreements for doctors and health therapists. The HIV and Aids programme receives an additional R8,7 billion over the MTEF to ensure that sufficient resources are available for government to deliver on the commitments announced on World Aids Day.
The 2010 Budget introduces the Expanded Public Works Programmes for the social sector. In 2010 this grant will perform as a basic wage subsidy for nonprofit organisations working in home community-based care, allowing them to pay salaries to volunteers. This year an incentive model will also be developed for implementation in the 2011-12 financial year. This should create incentives for provinces to create labour-intensive employment that provides much-needed relief and support for the needy and vulnerable.
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, and an additional R12,2 billion. The local government equitable share receives a further R6,7 billion to protect the poor from increased electricity prices and secure the delivery of free basic services to all poor households.
It is critical that intergovernmental grants are designed in such a manner that they support optimal outcomes. It has become evident that there is a need to reform the municipal infrastructure grant to appropriately respond to the different demographic, economic, infrastructural and institutional challenges faced by the 283 municipalities in the country.
In the 2009 Budget the municipal infrastructure grant for cities was introduced to enable the cities to more effectively manage, support and account for built environment outcomes.
The allocations for capacity-building totalling R1,8 billion over the 2010 MTEF continue to be complemented by the Siyenza Manje programme, via the Development Bank of Southern Africa, to develop skills in engineering, planning and financial management within municipalities. The Department of Co-operative Governance and Traditional Affairs announced the Local Government Turnaround Strategy in 2009. Government works in a co-ordinated manner to ensure that capacity-building initiatives are implemented coherently and also create a supportive environment for municipalities.
Chairperson, I would like to thank the committee for the manner in which they dealt with the Division of Revenue Bill and I look forward to further engagements. We would want to say that the recommendations in the report will be implemented working together with the committee. It is clear that the allocations contained in this year's Division of Revenue Bill should put government in a better position to accelerate service delivery and improve the efficacy of public services. Thank you.
House Chairperson, hon Deputy President, colleagues, the ANC government's steely resolution to create a better life for all and roll back the frontiers of poverty through focusing on its five manifesto priorities is demonstrated in the division of revenue across all three spheres. It follows, therefore, that the certainty of meeting these priorities is strengthened or weakened by the quantity and quality of resource allocation towards this realisation.
The centralisation of revenue raised nationally is intended to foster the centripetally and spherically autonomous implementation of the ANC government's priorities to create hope and restore dignity to ordinary people. The idea of South Africa as a unitary state characterised by high inequalities should inform the division of revenue.
A division of revenue which is shorn of a historical basis is prone to inadvertently catalysing the equal treatment of unequals. Therefore, as a developmental tool, the division of revenue should be acutely aware of righting the wrongs of the past and redressing those imbalances.
South Africa is a country in transition from a past marked by the exclusion of the majority from decent services and amenities. This was engineered to perpetuate the system of coexistence between the opulent elite and toiling majority. The creation of Bantu native reserves had no developmental genesis and implementation, but ensured comfort and plenty to the ruling oligarchy. This malicious intent is what bequeathed to our young democracy the so-called rural and poor provinces and municipalities.
Section 214 (1) of the Constitution of South Africa requires that -
An Act of Parliament must provide for -
an equitable division of revenue raised nationally among national, provincial and local spheres of government.
This is the report of the Bill the Minister tabled in this House. The Intergovernmental Fiscal Relation Act, Act 97 of 1997 also prescribes the process for determining the equitable sharing and allocation of revenue raised nationally.
The Minister of Finance has, as required by the Money Bills Amendment Procedure and Related Matters Act, Act 9 of 2009, responded to the recommendations of Parliament at the adoption of the Medium-Term Budget Policy Statement, MTBPS. The response is contained in the Budget Review in Annexure A.
There is an urgent need for Parliament to train Members of Parliament on this Act and to accelerate the process of implementation because the Act guides us on the procedures of amending or not amending the money Bills, especially the Budget. Contained in the Division of Revenue Bill, as required by section 214 of the Constitution, is the share of national government and the equitable shares of provinces and municipalities, including conditional grants to provinces and municipalities.
The Bill seeks to regulate the procedures to be followed on how and when these resources should be transferred to provinces and municipalities. It spells out the roles of national departments as transferring offices and the requirements of the receiving offices.
During the hearings we observed that the National Treasury and the departments administering certain grants needed to pay closer attention to the procedures provided for in the Intergovernmental Fiscal Reviews, IGFR. A dispute arises when conditions of reporting appear to exclude the departments that are responsible for implementation. The reports from all the implementation agencies, municipalities or provinces must be communicated to the relevant departments without creating an unnecessarily complicated reporting regime for the implementing agency or municipality. These reports should be and can be co-ordinated at both provincial and national level. We expect the 2011 division of revenue to include a clause addressing this matter.
The Committee on Appropriations recommends that the National Treasury and the Co-operative Governance and Traditional Affairs, Cogta, continue to engage on the matter of unspent conditional grants that municipalities fail to return to the national fiscus as required by the Public Finance Management Act and the Local Government: Municipal Finance Management Act. It should further investigate whether National Treasury can deduct a balance from the funds that have not been returned from the equitable share.
The Public Finance Management Act and the Local Government: Municipal Finance Management Act provide clear guidelines on procedures to be followed regarding unspent conditional grants. Therefore, we would encourage Cogta and National Treasury to hold workshops for their municipal treasuries and to report to Parliament by the end of May.
Treasury regulations require that agents apply for a rollover of unspent but committed funds. Parliament would like to engage National Treasury to withhold the funds of municipalities that do not have capacity to spend. As a committee we insist that any transferring national officer must produce proof of the steps taken to build capacity in that municipality, as required by the Constitution and the Local Government: Municipal Finance Management Act.
The withholding of funds is tantamount to penalising the communities that reside in those municipalities. Though withholding of funds is legal, punishment should be directed to the officials, not to the communities. In fact the next division of revenue must include a clause that allows for a fraction of the grant, for example, 4% or 5%, to provide for capacity- building.
Currently there are demonstrations demanding service delivery in different municipalities. Many of these demonstrations are directed at the wrong people. Demands for services such as housing, crime prevention and jobs don't necessarily belong to the municipalities but to other spheres.
The committee supports the Expanded Public Works Programme, the EPWP, which intends to create longer working time. However, the national Department of Public Works must insist on portable skills that can be certificated, as was originally planned in this programme. We suggest that the Portfolio Committee on Public Works follows up on this matter.
The other challenge is that municipalities that can't spend cannot report on what they have done. As a result they are unable to be allocated further funds. Again, poor communities get penalised if these municipalities have not provided a report. This department will review the system.
I would like to express my sincere gratitude to the members of the committee who worked long hours to produce the report; committee secretary, Mrs Thoko Xaso; the researchers in the committee; my secretary; and the other support staff who really supported us. I thank you. [Applause.]
Chair, Deputy President, on Tuesday Parliament approved the report tabled by the Standing Committee on Finance in respect of the fiscal framework. We now need to discuss the expenditure in relation to the fiscal framework and revenue proposals. In his Budget Speech the hon Minister of Finance highlighted the key spending priorities of government to create a better life for all.
One of the main focus areas raised by the Minister is job creation. The Minister quite correctly said that one in four adults seeking work is unemployed and that almost half our young people have not found work. We agree with the Minister that job creation is of the utmost importance. Not only will people with jobs be able to look after themselves and their families financially, but they will also be contributing to the tax revenue, growth in the economy, better schooling and opportunities for their children, as well as building a sense of self-esteem.
The Minister announced various measures by which government proposes to create jobs. These included, amongst others, a shift in emphasis towards labour-intensive jobs, increased public sector infrastructure investment of R845 billion over the next three years, increased expenditure on the Expanded Public Works Programme, increased investment in skills development, encouragement of small business development, and a focus on promoting youth employment.
These proposals are generally welcomed, particularly the one of a cash reimbursement to people who employ young people without experience, and whereby an expected 800 000 jobs will be created in the short term, with a further 500 000 jobs of this nature by 2013 - a DA policy, of course.
The proposed allocation of R52 billion over the next three years for the Expanded Public Works Programme, however, is disconcerting. Although it aims to create 4,5 million job opportunities, the jobs are, unfortunately, of a short-term nature, and no, or very little, skills transfer takes place.
The Department of Public Works, in a presentation to the Appropriations committee, admitted that it was impossible to train all people employed on the EPW programmes in order to improve their skills levels. The appropriateness of this programme is therefore questionable, as it does not create sustainable, permanent jobs nor does it equip recipients to find jobs more easily afterwards as a result of skills gain. In our opinion, the funds provided for the EPW programmes should rather be used to extend the Youth Employment Programme and grant more assistance to small and medium enterprises.
The proposal that a significant portion of the public sector infrastructure investment to create jobs be undertaken by state-owned enterprises is also disconcerting. These parastatals have received some R260 million in financial bail-outs over the past four years due to bad management. Eskom in particular, where the major portion of these infrastructural investment job opportunities is to be created, is a prime example of how business should not be managed. Instead of job creation, Eskom is likely to contribute to job losses in the economy with their huge proposed, inflationary tariff increases.
Soos daar in Afrikaans ges word, dis soos om wolf skaapwagter te maak. [As the Afrikaans saying goes, that would be like setting the fox to keep the geese.]
In his speech on the fiscal framework in Parliament on Tuesday, the hon Mufamadi mentioned the example of a graduate known to him who finds it impossible to find a job. Yet we have government departments with vacancy rates of 25% and more, with funding available to fill these vacancies. Government should indeed be ashamed that, on the one hand, we have thousands of people out there looking for jobs, and on the other, thousands of job opportunities in government itself, which they fail to fill.
One of the greatest impediments to creating jobs in South Africa, of course, is the current labour legislation. In his Budget Speech, the Minister said, and I quote, "Organised labour must embrace and act on behalf of all our country's workers, both those employed and those desperate for employment."
The Minister is quite correct. Conversely, Cosatu, in a presentation to the Finance committee, attacked the fiscal policy framework and contributed nothing in terms of recommendations with regard to the relaxation of our stringent labour laws in order to create more employment. They also failed to offer improved productivity in the workplace, as opposed to only demanding higher wages. Had they done this, our businesses would become more competitive in both the local and overseas markets, and more rather than fewer jobs would have been created. They are adamant that labour brokers be abolished, thereby shedding even more jobs in the economy.
Cosatu seems to be less interested in job creation and more in increasing membership to ensure a good life for leadership. They propose, instead, a wealth tax to balance the budget. They seem to forget that it is normally the wealthy investors who start businesses and thus create employment. If they do not believe me, I suggest they contact that wealthy businessman Julius Malema to establish how, through his endeavours and directorships of companies, he created a stream of jobs in Limpopo. Another alternative, of course, is Chancellor House.
Cosatu should rather follow and support the DA's model of creating an open- opportunity society. It will lead to the attraction of more investments, which in turn will lead to economic growth and, hence, more jobs. Unfortunately continued talks about the nationalisation of mines, the takeover of the Reserve Bank, the scrapping of inflation targeting and the tendency of increased centralisation of power will negate any possibility of attracting more investment and, therefore, more jobs. [Applause.]
House Chairperson, Deputy President, we are dealing here with the basis for distributing revenue to the three spheres of government for the financial year 2010-11. The debate on the Division of Revenue Bill takes place against growing uneasiness and impatience across our country.
Service delivery rumblings, witnessed almost daily, are becoming ominous. The poor voters are at the receiving end. The passing of the Bill today must be meaningful to our people. As Parliament we must hold government accountable to its promises. No more hollow promises at all levels of government should be entertained. Government must address the plight of the people.
Cope welcomes the Budget reform which empowers Parliament to amend government's budget so that the most urgent needs of South Africans are indeed addressed. The million dollar question is, however, whether this House is equal to the challenge of urgently appointing highly skilled people with real capacity and the ability to deal with budgets or will it just resort to cadre deployment rather than the skills that are appropriate for Parliament's budget office.
Of course, because of the ruling party's "sweethearts" we are about to encounter the issue of accountability. Regrettably, the developmental state is moving very slowly in respect of the development of our people, hence Balfour is on fire today.
Cope advocates an activist state wherein citizens will keep government accountable. We must understand that people are not taking kindly to this new segment of the ruling party called "tender-preneurs", as confirmed by the SACP pronouncement on it. People are sick and tired of being used to keep the ruling few in their positions, from where they pick the public pocket for their own enrichment.
Cope confirms that the Minister of Finance performed a good balancing act with the Budget. Now government must walk the talk, so that the people who are protesting can see an honouring of promises that were made, leading to change in the places where they live.
We are concerned that the state-owned enterprises are treating the public purse as their own cash cow to be used for regular milking. In passing this Bill, we need assurances that they will be watched strictly by Parliament. We must stop making the people's assets into plundering fields for those who are well aligned and connected. This cancer must be rooted out. I wonder, however, if the Minister of Public Enterprises has the power and the support of Cabinet to make sure that those who are "connected" are dealt with when they are discovered with their hands deep in the cashbox.
Government's promise to focus more on job creation and rural development has our support. However, the proof of the pudding is in the eating, and seeing is believing. This focus should not be undermined because some well- connected people are aiming for self-enrichment. The people's patience is running thin. We are worried that we are seeing a repeat scenario of George Orwell's Animal Farm.
We agree that crime, health, education, jobs and poverty reduction are critical service-delivery barometers. In this debate today we are appropriating R902 billion of the Budget to the three spheres of government - a lot can be done for the poor with that.
Let me turn to the conditional grants and their potential for job creation. With the receiving entities unable to manage debt and lacking proper financial management, these grants are open to mismanagement. You don't have to be a rocket scientist to know that much of these grants will be used to cover debts in local authorities. We note that the Financial and Fiscal Commission will be reviewing the grants. Cope believes the review can be done quicker. We believe further education and training colleges should be capacitated to address the shortage and mismatch of skills, and to prioritise the creation of those skills whose absence have been identified as limiting the growth of the economy.
As Cope we are delighted that the committee has agreed that the money allocated and appropriated will be accounted for by the Ministers, the departments and the local government.
We support the intention to recapitalise about 200 technical schools. We support the Dinaledi schools, but we want to emphasise that given the measures that have been put in place to deal with their failures, all schools must put programmes in place to enable them to perform appropriately and to implement what has been agreed upon.
We want to make this point very simply: Money that is intended for projects must be put to optimum use. The enormous leakages everywhere have to be stopped. This government was born out of the struggle of the people and that struggle must be rewarded. To abandon the people in whose name the struggle was waged to benefit a few is to betray the people. We support the Bill but we wish to warn that it could very well become the rope with which the ruling party hangs itself. Thank you. [Applause.]
Chairperson, hon Deputy President, colleagues, the hon Ramatlakane has indicated that many members have their hands in the cashbox, but I can assure you that in many municipalities, and sometimes in the provinces, even the cashbox has disappeared. [Laughter.]
However, he also spoke about the question of municipalities using their conditional grants and the interest derived from them to pay operational expenditure within those municipalities. That is true; it happens. It is largely because National Treasury has not as yet devised a way of allowing municipalities to have separate banking accounts.
For example, if money is allocated for a water project in a particular municipality, there should be a trading account for that particular project. Municipalities now put these funds into a global account, hence there is no accountability. And if they have the opportunity to use some of those funds to pay staff and other expenses, they do so. Treasury should address this kind of situation as quickly as possible.
However, when one looks at the Division of Revenue Act, it's about sharing amongst the three spheres of government. If you share funds between the three spheres of government, you've got to rely on credible statistics. It is, therefore, a matter of concern that the Financial and Fiscal Commission indicated to our committee that the data they are using at the moment for an equitable share was last updated in 2001. So, we cannot rely on data from 2001 to ensure that there is an equitable share. I hope Statistics SA takes note of this so that we can have an equitable share distribution.
We as the IFP associate ourselves with all the findings contained in the committee report, but it is quite ironic that the first finding of the committee is as follows:
The committee noted with concern the persistent delays in implementing the pronouncement by the President of the Republic of South Africa with respect to the reopening of nursing and teaching colleges.
This is dj vu. As far back as 1994 the IFP said teaching and nursing colleges should not be closed because it would cause mayhem for our young people who would not be given the opportunity to be trained in those disciplines. What has happened today? We are returning to open teaching and nursing colleges. A number of those teaching colleges are in a dilapidated state and now we'll have to spend a lot of money repairing them. I think it was political expediency to close those colleges at that time.
However, what we would like to see is the Department of Health doing an audit on all the institutions that offer training to the so-called nursing colleges, because many of them are fly-by-night institutions. Young people and their parents spend a lot of money sending the youth to these institutions only to find that the qualification they receive cannot be utilised to get a job in a hospital or clinic.
Our biggest concern with the Division of Revenue Bill and how things operate is the underspending of funds. It is criminal when municipalities and provincial governments underspend. To give you an example: In terms of the municipal infrastructure grant 2008-09, Umdoni Municipality, my neighbouring municipality, received R195 million but spent R6 million. They spent only 3,3% of their allocation. Umhlabuyalingana spent 19,5%, Mtubatuba 9,7% and Eden 9,4%.
This is something we as government should not tolerate. As I said earlier on, the money is there. The money is not being utilised properly because people are still putting their hands in the cashboxes and people are not skilled enough to ensure that they spend the money for its intended purpose. Who gets short-changed, as a result, are the millions of people out there who expect this government to deliver on its mandate and promises.
Lastly, I would like to speak about the water and sanitation grants. The intention exists to do away with some of these grants and to consolidate others, whilst money is allocated for new water projects. We have to think seriously about ageing infrastructure. In a number of municipalities throughout the country, there is water. We have been receiving water for about 20 to 30 years, but the infrastructure is ageing so much so that there are leaks all over and people don't get water. We should therefore concentrate on providing funding for ageing infrastructure. Thank you. [Time expired.] [Applause.]
Chairperson, hon members and Ministers present, Deputy President, the division of revenue is a vital instrument that provides the first step in the process of service delivery. It is necessary and logical that a large proportion of the revenue should be channelled towards the provinces and municipalities.
These two tiers of government have a constitutional service delivery mandate. What is more, they are, by virtue of proximity, supposedly better placed to deliver. Unfortunately this is where the entire process falters. We have, since the inception of democracy, witnessed a distinct inability amongst provincial and municipal administrations to manage these revenues and deliver the intended services.
Conditional grants do not solve this problem. At the heart of the matter is a severe lack of skills coupled with an institutional culture that celebrates ineptitude and turns a blind eye to crony-ism and tender fraud. National government will simply have to improve its ability to monitor the spending of provincial and local governments. We welcome the recent announcement of a dedicated unit to investigate tender fraud.
One of the leading causes of service delivery failures and key reasons that the division of revenue does not produce the intended results is the countless vacancies at provincial and municipal level in critical areas such as financial management and engineering.
As the UDM has indicated before, government is missing an opportunity. It could improve service delivery by providing jobs to qualified and skilled professionals whilst at the same time reducing reliance on expensive consultants. These vacancies present a major stumbling block. However, it will require political will to ensure that these positions are filled. By their nature, such positions will put the brakes on the gravy train.
It is time for those who ride on this gravy train to realise that they may be able to ignore our appeals to their consciences and moralities, but they cannot indefinitely ignore the increasingly frustrated communities marching in the streets. Thank you. [Applause.]
House Chair, hon Deputy President, hon members, in 1987, in his January 8 Statement, the late ANC president Oliver Tambo said:
We must proceed from the position that our task is to win a revolution. Political revolutions are about the capture of state power and its use to advance the objectives of fundamental social transformation. This task must be carried out consciously and intentionally by the revolutionary forces to bring about profound change in favour of the social classes and strata that have gained power. Without the victory of the revolution, revolutionary changes are not possible. The state is a vital feature in an effort to bring about those revolutionary changes, because a new society cannot be built within the existing framework. Hence we'll see the opposition's attack on our progress as we incrementally achieve the revolutionary state that was envisaged.
It is critical that we bear this in mind at all times when addressing budgets as tools of transformation.
The Budget and Division of Revenue Bill allocate resources to give effect to the ANC's objectives and policies, ensuring that the state's resources are allocated in a manner that systematically and incrementally transform the state and concretise the people's contract for a better life for all. The Bill, in our opinion, achieves these objectives in the 2010-11 financial year and beyond.
As an activist Parliament, it's our responsibility to transform the budget process into one that will culminate in an activist budget, using organs of people's power to achieve this. The Money Bills Amendment Procedure and Related Matters Act is a mechanism through which this can be achieved. It is our responsibility to begin engaging our people around the provisions in the Act and how these will be phased in over time.
Furthermore, the Act is an instrument that sets out a legal framework that gives a voice to the voiceless in determining how resources should be allocated amongst the various spheres of government. As public representatives, it's our collective responsibility to ensure that all sectors of society are mobilised into organised constituencies.
In forming partnerships with the people and to give meaningful expression to the notion of partnership, we as Parliament must ensure that we strengthen our interaction with the organs of the people's power that this very House, through legislation, gave effect to, namely school governing bodies, SGBs; community policing forums, CPFs; ward committees; hospital boards; clinic committees etc. These organs of the people's power can play a significant role in assisting in the budgeting, monitoring and evaluation process, in turn accelerating the implementation of the five key areas of government. Our people must be involved in the planning, execution, monitoring and evaluation of services delivered to them as they are direct beneficiaries of these services. As such their participation is critical in advancing the national democratic revolution.
In ensuring that the strategic objectives are met through the Division of Revenue Bill, let me emphasise the following from the Bill: The ANC government's commitment to the implementation of the five priorities demonstrates itself in the revenue allocation to provinces, as the Constitution confers concurrent powers to provinces with respect to, among other areas, education and the Expanded Public Works Programme, the EPWP, through the Department of Public Works. In that regard, equitable allocations should be made to provinces to capacitate them to contribute to their realisation of sustainable, quality public education and the creation of decent work.
Over the three-year period, provincial transfers will grow at an average annual rate of 7,7% to R369,3 billion in the 2012-13 financial year. The total transfers to provinces for the 2010-11 financial year amount to R322,9 billion, with R261 billion allocated to the provincial equitable share and R61,9 billion to conditional grants.
Part of this adjustment is meant to assist provinces in accommodating the higher-than-anticipated wage settlements and the occupation-specific dispensation, OSD, payments for Health and Education. Despite the general challenges of scarcity of skills, there tends to be a higher turnover of skills in areas such as education and health. The highest skills turnover is often attended by skills concentration in urban areas and scarcity in rural areas. The OSD implementation should therefore be expedited to enhance retention and equitable skills distribution.
The ANC has always viewed education as an instrument of both liberation from poverty and underdevelopment and an empowerment tool to ensure that skills and training required to build a prosperous and equitable national democratic society are developed and retained. Education is one of the areas that still reproduce the imbalances of the past. Interventions made in education should be to ensure quality and equity in the education system through allocations that seek to empower and support learners.
To give further effect to these objectives, the Department of Basic Education administers the National Schools Nutrition Programme grant, the Dinaledi Schools grant, the Technical Secondary Schools Recapitalisation grant and the HIV/Aids Skills Education grant. As a result of the split in the education Ministry and the formation of the new Department of Higher Education and Training, the further education and training, FET, colleges grant is introduced to protect current spending on these colleges by provinces while the legislative processes required to shift this function to national government are completed.
Total expenditure on further education and training colleges was taken out of the equitable share and shifted into this conditional grant. The grant amounts to R11,9 billion over the Medium-Term Expenditure Framework period. It should be noted that the Department is to encourage FET colleges to develop courses that will be utilised by the various sector education and training authorities, Setas, for training purposes, thus creating revenue flows for the FETs and improving sustainable job opportunities for the participants.
Unlike the opposition parties, the ANC is planning ahead; it's putting processes in place that will concretise our ability to deliver on our election manifesto.
Phase two of the Expanded Public Works Programme aims to create 4,5 million short-term jobs nationally that will last for 100 days. The effect of job opportunities which are created through the public works programme is not only poverty alleviation and skills transfer but the possibility of subsequent permanency in some of the jobs offered. The EPWP incentive grant to provinces for the infrastructure sector provides incentives to provinces and municipalities to increase spending on labour-intensive programmes.
The 2010 Budget introduces a new grant on the Public Works Vote, namely the Expanded Public Works Programme grant for the social sector. This grant receives R57 million in 2010-11 to subsidise nonprofit organisations that have been using the services of unpaid volunteers so that these volunteers can receive some form of remuneration. During 2010 a comprehensive funding model for a programme that will incentivise labour-intensive employment in the sector and inform grant allocations for 2011-12 and 2013 will be developed.
Municipalities play a critical role in furthering the ANC's policy objectives of providing services to all while facilitating local economic development. Over the next three years, national transfers to local government will grow to accelerate the delivery of basic services to households that cannot afford them. In line with the ANC policies, government is accelerating efforts to assist municipalities in improving service delivery capacity.
The 2010 MTEF will see an additional R10,3 billion allocated to the local government sphere, of which R6,7 billion is in respect of the local government equitable share to ensure conditional expansion of access to basic services, and to assist municipalities in dealing with increases in the cost of purchasing bulk electricity. The remainder of the R10,3 billion will be allocated to the infrastructure grants. [Interjections.] After 30 years, hon Mike, I thought you would've had enough.
It is recognised that economic disparities do exist between and within provinces and municipalities, and that provinces and municipalities have different demographic and economic profiles, and markedly different levels of economic development. The equitable share formulae are therefore redistributive, and in particular, allocations have been increased to invest in economic infrastructure like roads, social infrastructure and schools in order to accelerate economic growth and job creation.
The extent of interventions needs to differ among provinces and among municipalities, mainly due to the disproportionate development strategies of the apartheid era. The priorities of successive ANC-led governments over the years have sought to ensure that social and economic deficits inherited from the apartheid era are addressed.
It is in light of the above that we, as the ANC, are confident that the Division of Revenue Bill will give effect to the strategic objectives of government. Thank you. [Applause.]
Mr Chairman, I forgot to listen to what the hon member was saying. I wonder if he could repeat his speech. [Laughter.]
Hon Ellis, this is not on.
Chairperson, I'm just asking that the hon Ellis listen very closely so that I won't have to repeat my three minutes of speech.
We had a lengthy debate earlier this week about the fiscal framework where it concerns - and the ACDP expressed concerns about this - the budget deficits and ballooning government debt levels. Now as we deal with this Bill today, it is interesting that the Financial and Fiscal Commission warned that the fiscal situation in South Africa is very weak, especially regarding provincial and local governments. It added that, given the slow rate of economic recovery and the inherent lag in provincial and local government tax revenue growth, many provinces and local governments will eventually be forced to enact large cuts in public spending.
This is obviously a matter of great concern. In particular, the Financial and Fiscal Commission adds that public education and health are likely to be hit very hard. This is highly regrettable, but to a large extent unavoidable due to the fiscal framework and the situation with which we are faced. However, we agree with the commission that cuts should be limited to noncore areas to ensure that basic service delivery in the crucial areas of education and health is not compromised.
It is then very concerning to us as the ACDP that some conditional grants are being utilised to service overdraft debts at provincial and local government level. This is according to the report. This defeats the whole purpose of conditional grants, which are conditional on certain services being delivered and on compliance with specific requirements. We agree with the recommendations that have been made to address the issues of conditional grants.
We agree that "a more coherent and co-ordinated approach" is required in the management of conditional grants to ensure prudent spending and to achieve the intended objectives. Clearly as parliamentarians in our committees we will have to exercise better oversight, particularly in view of the Money Bills Amendment Procedure and Related Matters Act. The Parliamentary Budget Office, once it is up and running, will hopefully provide support to us in that regard.
Now as far as the report on this Bill is concerned, we clearly support the recommendation of the reopening of nursing and teacher-training colleges. The obvious question - as was raised before - is why were such institutions closed in the first place? Their closure resulted in a shortage of teachers, doctors and nurses.
We are also concerned that certain grants, relating to addressing backlogs in water, electricity and sanitation at clinics and schools, have been cancelled. Clearly there are still huge challenges in these areas and we wonder why that decision was taken.
Lastly, the Deputy Minister of Health stated this afternoon - if I heard him correctly - that there was no moratorium on the filling of vacancies in his department. I was then expecting him to object to the report on this Bill, which clearly states and recommends that, "the Department of Health should reconsider its moratorium on the vacancies", yet he did not express any view on this statement and recommendation in the report. But the ACDP will support the Division of the Revenue Bill.
Chairperson, on a point of order: Is it correct for the hon member to misrepresent me and attempt to mislead Parliament in the manner that he is doing now?
Chairperson, I indicated "if I understood or heard him correctly".
Stay away from ...
Hon member, don't answer yet; let's hear what the point is.
Chairperson, I said, "There is no moratorium on critical posts". Thank you.
Hon member, do you then want to correct this aspect, because he did not say generally, he said "on critical posts".
Chairperson, on a point of order: I think the difference of opinion across the House of Parliament is quite in order and I don't think that that constitutes a point of order ...
Can we allow the hon member to ...
... but, Chairperson, I'm trying to protect him because I don't think he has to reply to it.
Thank you, hon Ellis. Hon Sefularo, can we see whether the hon member still insists on the issue?
Okay.
Chairperson, the recommendation in the report that was accepted by this House speaks about vacancies; it does not speak about specific vacancies. I would have thought that the Deputy Minister would have raised that matter. Obviously he might not have read the report, but if it is specific vacancies to which the report refers, then the report should have said "specific vacancies". At the moment the report says "vacancies in general".
So what the Deputy Minister is saying is that he only spoke about critical vacancies, not vacancies in general.
Chairperson, I accept his explanation.
Okay, thank you very much.
Thank you, Chair.
Ke a dumedisa bagaetsho. [Good day, ladies and gentlemen.]
The purpose of the Bill is noble. For a long time now we have seen an inequitable sharing of resources in terms of the provinces. The Bill needs to be properly consulted upon, and an issue that needs to be taken into account is how the national government can play an oversight role over how and what gets allocated to the local spheres of government. As it stands, whatever mechanism exists is not in the best interest of the people, who should be receiving such services at local level.
An oversight role should not only come into play when there is an unqualified report from the Auditor-General, but also when there is a need to develop mechanisms in which the national government plays such a role continuously. Thank you.
Hon Chairperson, the MF congratulates the Minister of Finance on the award he received in India recently. We are proud of that.
We are very positive about the allocation of funds for youth employment skills development and the policy shift in respect of the provision of housing for those who belong to the middle-income group. The mistake South Africa must not make is digging deeper into becoming a state giving handouts rather than being a developmental state.
A lot of money should have been given to education for the expansion of the technical aspect and to where there is skills development. In a country where you have to import skilled workers and essential workers in the government service - about 800 000 - and you pay them 30% more than the normal wage, there is definitely something wrong with the direction of our education.
If you look at Gujarat in India, for example, every year they build more technical institutions and medical schools. The MF strongly believes that as far as education and training is concerned in our country, the public sector is playing its role, but the private sector is not.
We have made the mistake of spending billions on capital-intensive projects instead of on labour-intensive projects, and we are going to pay a heavy price.
No country has economic spin-offs after a World Cup. German economists have confirmed that. Korea, Japan and the United States all suffered. Our job must be to make sure that everyone in South Africa has a house and everyone is skilled. Where are the agrarian, economic and industrial revolutions? Black Economic Empowerment, BEE, does not mean that somebody who has a firm gets a contract and farms it out to other people. The construction and the manufacturing industries are important.
However, notwithstanding all of these concerns, the first Budget of the Minister of Finance is welcomed by the MF. Remember, in the MF's election manifesto, we demanded the following: Lifestyle and unaccounted-for enrichment checks, inspectors in education, and a planning commission. Sars is undertaking the lifestyle check, but add unaccounted-for enrichment checks and what we have developed is called "tenderpreneurship".
There is another industry that has become very important, and that is the knowledge industry. It is high time that our country moves away from race. Forty-two per cent of scientists in the USA are Indians, and they do not take a ruler and measure an affirmative action policy.
The majority of the players in the New Zealand team are black, but the New Zealand whites do not have a quota for blacks. South Africa is going race crazy. The world is grabbing qualified people and South Africa is chasing qualified people out of the country. Study the wise words and the advice of world-renowned Professor Ramphele.
From today onwards the knowledge industry must grow, and we must count the number of graduates and middle-class people we are producing. India's growth rate is what it is because of the knowledge industry. Qualified South Africans are getting e-mails from the US offering them jobs and asking when they can start, and in South Africa we parade matriculants. The MF will support the Bill. [Time expired.]
Hon Deputy President, hon Deputy Minister, hon members, the purpose of the Division of Revenue Bill is to provide for the revenue raised nationally among the national, provincial and local spheres of government for the 2010-11 financial year, and to see that the money raised is spent by these spheres of government. What is significant is that this Bill provides for the Money Bills Amendment Procedure and Related Act, Act 9 of 2009, which empowers Parliament to amend the government Budget and to oversee government actions and monitor spending.
What is also noteworthy is that this piece of legislation will be phased in over a period of three years. The Standing Committee on Appropriations and the Finance committee met on a number of occasions to finalise the establishment of the Parliamentary Budget Directorate, and that will provide support to assist the Finance and Appropriations Committees to strengthen their legislative oversight. The DA supports the establishment of the Parliamentary Budget Office. The 2010 Budget and the Division of Revenue Bill must be seen in the light that 900 000 South Africans lost their jobs due to the economic recession, that only 12 million South Africans are permanently employed, and that 14 million South Africans depend on some kind of government grant.
The recent escalation of 24,8% in the price of electricity and other inflationary factors may mean that within two years the number of South Africans that depend upon social grants may even increase to 16 million.
The plight of the poor and the needy cannot be left unattended to, but it is also acknowledged that the very limited resources of government must be spent properly so that the benefits of the taxes flow through the system, such as health care, education, municipal infrastructure grants, etc.
In a submission to the Appropriations committee, the Financial and Fiscal Commission said that an in-depth review of the management of conditional grants was needed. It is an open question whether prudent spending and the intended objectives regarding the creation of jobs are attained by government agencies and parastatals. The DA will welcome a review. We urge the Minister to intervene and create the capacity so that proper performance audits can be conducted in dysfunctional entities.
Globally national, provincial and social governments do not grow economies or create jobs. Businesses do that. But governments, through their departments, provide an enabling environment - or a disabling environment, if the department is dysfunctional - which either encourages or discourages economic growth. The task ahead is to alleviate unemployment, which at the present rate is 26,5%. This, Mr Chairman, is clearly unacceptable.
The DA calls upon respective government departments to review our present rigid regulatory environment. The cost of doing business in this country is exorbitant. We need investment. It is said that it is possible to set up a company in less than three weeks in some parts of the world. If we want to alleviate poverty and unemployment, we must be able to compete with these economies if we want to attract sustained investment.
Poor delivery of services is endemic to South Africa's largest parastatals. Telkom's service is expensive, with a high fault vote; Eskom's supply problems have cost the manufacturing and mining sectors millions, while Transnet's rail division inhibits growth in the mining and agricultural industries. The Chamber of Mines has noted that the lack of rail infrastructure is a huge bottleneck in terms of the development of our mineral resources.
The present system of management within these parastatals is clearly not acceptable. Eskom and Transnet are, at the present moment, without a permanent chief executive officer. What is of further concern is that Eskom has stated publicly that South Africa's electricity supply-and-demand situation will be tight by the end of this year. To bridge this difference, it is important to involve all role-players to take proactive steps to provide adequate services. I thank you, Mr Chairman. [Applause.]
Agb Mevrou die Huisvoorsitter, die VF Plus neem kennis van die konsepwetgewing ten einde uitvoering te gee aan die allokasie van staatsinkomste na al drie vlakke van regering. Minister Gordhan het 'n ewewigtige begroting aangekondig en daar is groot planne in die pyplyn om werkskepping te bewerkstellig.
Die bekommernis wat die VF Plus egter ten aansien van hierdie regeringsfunksie het, l weer eens by die implementering van al die planne en die korrekte aanwending van die begrotings. Endemiese korrupsie, baantjies vir boeties, kaderontplooiing, regstellende aksie en swart bemagtiging is kritiese elemente wat die hele Suid-Afrikaanse projek tans van progressie beroof.
Trouens, dit vind reeds op ongekende vlakke plaas. Daar is ook 'n sterk persepsie onder burgery dat politici in die ANC net daar is om hulle eie sakke te vul, om die staat te plunder en om bloot lippediens te dien oor dienslewering. Hierdie sake sal met 'n ongekende aggressie aangespreek moet word. Die ANC-regering sal ook vir Malema moet aanspreek oor sy tenders en swak dienslewering, onder meer. (Translation of Afrikaans paragraphs follows.)
[Adv A D ALBERTS: Hon Madam Speaker, the FF Plus notes of the draft legislation with the view to give effect to the allocation of state revenue to all three spheres of government. Minister Gordhan announced a balanced budget and there are major plans in the pipeline to bring effect the creation of jobs.
The concern that the FF Plus has with regard to this function of government lies once again in the implementation of all these plans and the proper employment of these budgets. Endemic corruption, cronyism, cadre deployment, affirmative action and black empowerment are critical elements that are at this time holding up the progression of the entire South African project.
As a matter of fact, this is already happening at unprecedented levels. There is also a strong perception among the citizenry that politicians in the ANC are there just to fill their own pockets, to pillage the state and to simply give lip-service with regard to service delivery. This matter will have to be tackled with unprecedented aggression. The ANC government should also speak to Malema regarding, inter alia, his tenders and poor service delivery.]
The unprecedented flare-up of service delivery protests is evidence of the uselessness of a Bill if it is not respected. The government and all its office bearers must be seen to respect the rule of law. If they do not, then the people who are paying the salaries of the government will not respect the government and its laws either.
It is a simple process of cause and effect. Therefore, when the Minister of Co-operative Governance and Traditional Affairs says that it is the fault of white ratepayers' associations that certain local governments are not financially viable, he is missing the point completely. If government did its job properly in the first place, citizens would not have to organise into ratepayers' associations and make use of self-help to survive. It is truly that simple.
One of the ways we can create sustainable service delivery is to bring back the lost expertise forced out of the Public Service and the free market by interventions like affirmative action and black economic empowerment. Otherwise we will have to contend with the situation aptly described by Abbey Makoe in today's The Star newspaper, and I quote him:
Never, it seems, can the ruling party rely on its rich history in order to curry favour with short-changed communities.
And then he asks: What is to be done? The FF Plus answers: Stop corruption and bring back the lost expertise from the minority communities to act as mentors for future generations. I thank you, Madam Speaker.
Hon Chairperson, Deputy President and Members of Parliament, before I get to my speech I just want to say that it is very interesting that FF MP Mr Spies requested that retired white technicians be employed and that the ANC government employ those people. So if they don't make any difference, the hon member from the FF must go and talk to them and let them bring about the difference he said in this Parliament they would bring about. [Applause.]
In this debate I'll focus on the division of revenue in order to determine the extent of the allocations for quality health care and sustainable rural development. Section 214 of the Constitution, as already mentioned, demands that in terms of the division of revenue, resources are allocated in line with provincial needs, fiscal policy and efficiency at all levels of government in order to provide a better life for all. The provinces and local government are best placed to meet the needs and demands of the people, as well as to monitor the expenses in terms of what is happening locally.
The ANC government is guided by the Freedom Charter in that there shall be access to health care for all. No doubt, the Freedom Charter committed government to promoting a preventive health-care scheme, free medical care and hospitalisation, especially for the needy, old, women and the young. As a consequence we all know that since 1994 there have been many achievements in health care.
I can make mention of just a few of these. Greater access and availability of health services has benefited the targeted people. There is free primary health care for all, and right now we are discussing the implementation of national health insurance. There is accelerated implementation of the HIV and Aids plan; and there is improved access and addressing of the needs of those affected by HIV and Aids, including ARV treatment both nationally and provincially.
Nevertheless, we know that we still need to do more - making services available to all South Africans and ensuring better health outcomes. The resources of the public health system need strengthening in the areas of personnel and diseases related to HIV and Aids, and with regard to tuberculosis, the infant mortality rate and the life expectancy rate.
Conditional grants in health care play a large part. I will just mention a few of them, owing to time constraints. We have a comprehensive HIV and Aids grant. We have the hospital revitalisation grant. We have the health professions training and development grant, which will address all the recruitment needs and developmental needs of people, and especially focus, again, on specialists in medicine.
We all know that in the Northern Cape hospitals have been revitalised. The Robert Ferreira Hospital, the Themba Hospital and the Ermelo Hospital are also nearing completion as a result of the hospital revitalisation programme. Similarly, we all know that in the Free State there's a very intensive programme to address the HIV and Aids-related stigma, conscientising communities and making them aware of such health-related issues.
With regard to rural development, the ANC considers rural development a key pillar in addressing poverty, inequality and unemployment. Historically we know that people in rural areas were neglected owing to policies based on cheap labour and discrimination. We know that right now this is still continuing. We have the eviction of people on the farms. Rural people don't get any basic services, and it is our duty as the ANC to remember what the Freedom Charter said to us - "The land shall be shared by all those who work it." These people working the land will be helped with implements, seeds, tractors, infrastructure for irrigation and other forms of material support.
The hon Deputy Minister of Finance has already acknowledged that they have considered what the Appropriations committee has recommended to them, and that is highly appreciated, because it means they remember the mandate that was given to them by the people during the elections in 2009.
We can't run away from our five basic priorities which were in the manifesto of the ANC and are now the ANC-led government's policy. We can't run away from them and try to address other issues in order to satisfy people who are not interested in the development and upliftment of our people. [Applause.]
We are happy that the hon Nkosi Mandela referred to the grant to support water and sanitation infrastructure as part of the rural housing programme. Some people should also appreciate it. The reason why some people don't appreciate it is that they have never ever experienced what the people who voted for the ANC have experienced. [Applause.]
They never experienced the need for the Expanded Public Works Programme, which addresses the needs of all those people who don't have anything to eat, people who go to bed hungry. So the only way to address the hunger and poverty of the people is to come up with programmes like the Expanded Public Works Programme.
We discussed that issue in our meetings. We all understand what the EPWP means, we all understand what the second phase of it means and we all know that these people are going to bed hungry. Most of us here have people who work for us and go to sleep hungry, who tell us that they have relatives who lie hungry and they say, "Thanks to the ANC for the Expanded Public Works Programme". The fact is that the social factor of the Expanded Public Works Programme has been taken a step further and is going to employ these people on a permanent basis, and they are going to earn money like any other person. That will address the really basic needs of the people. They must not come here and grandstand and say that people have everything.
The people out there are listening to you. You go to people to vote for you but you say they must go to sleep hungry. I don't know how they will go to the polls and vote for you when you still disregard the little that the ANC has done for them to be able to eat. Let's do some introspection and ask ourselves: Are we being fair? Is the division of revenue unfair? It is quite fair, because it's addressing the needs of the people.
Whilst on this issue, the purpose of the Budget is to promote rural economic infrastructure which involves the building of roads and railways; the revitalisation of irrigation schemes, dipping tanks, fencing, community gardens and infrastructure; and the erection of bridges. It also goes further to address ICT infrastructure, because people in the rural areas need to be connected like all other people. What labour do we need? We don't need capital labour to do this. We need all these people to do that job, get paid the incentive - because we all know there's an incentive - and eat and sleep happily, like any of us present here.
The rural local government has to lead the process of development, land reform and agrarian reform. We all know that we are held fast by the willing-buyer, willing-seller system. No one addresses us and tries to help the Minister of Rural Development and Land Reform on how better to approach it, how not to sell the land to foreigners, but rather to sell it to the government with the price of the land not being market-related, and not ignore the needs of local people.
There is a lot of development in the agricultural sector. In KwaZulu-Natal there is the Agribusiness Development Agency, which rescued emerging farmers from collapse through its support. Consequently 13 farms, which fell mainly under the sugar production sector, were included in the sugar mills agreement with the Department of Agriculture.
Even in the Eastern Cape we saw on TV last week that people were happy, stating how the government has helped them. Let's all see that. Let's all think of the people. Let's all think of those people who, in 1994, addressed the Freedom Charter of the ANC, who took part in the Congress of the People representing the ANC, speaking about the Freedom Charter, feeling very well how people felt. They went there to address what we are addressing here.
The hon Nel said, "Don't retard our progress. Think of revolution and what our achievements are supposed to do." [Interjections.] Everybody needs to have a better life. Fortunately our committee knows everything. We are liberated on everything. Whatever statements they change in here we are going to address in our meetings. We are going to address the monitoring and evaluation issues in our meetings. We are going to sit down together and address the issues and see to it that the departments are performing well. We are going to sit on them, and we are going to roll up our sleeves and say, "Let there be delivery; let there be monitoring; let the committees account to us; and let even the portfolio committees address all the issues that affect us". The ANC supports the Bill. Thank you. [Time expired.] [Applause.]
House Chair, let me take this opportunity to thank all the members who contributed to the debate and supported this Division of Revenue Bill before this House. A number of issues were raised, but I am going to stick to those that relate to this Bill because some members happened to have brought the wrong speeches.
The issue of the conditional grants was raised by a number of members of this House and the committee. The performance of the grants has generally improved over the years. More children are being fed at schools compared to five years ago. Statistics also show improvement in terms of access to basic services such as water, sanitation, electricity and houses. HIV and Aids programmes are improving and a number of these grants are actually doing what they are supposed to do. However, we agree that more needs to be done. Processes are currently underway to review these grants. We trust that working together with the committee and this House, we will be able to improve on performance and oversight. At the same time we will ensure that government's programme of action is given effect.
Also, as Mr Singh indicated, we agree that provincial and equitable share formulas are based on outdated data. This is the reason that the matter is also being looked at and we trust that the 2011 Division of Revenue Bill will take this into account. One would recall that the last time we had a census was in 2001, hence the statistics we used are the only official stats available. However, we take the point, Mr Singh.
We also want to re-emphasise the fact that in order for us to ensure that these grants are not abused to pay debt or other unrelated matters which they were not meant for, as has been raised by some members, oversight in Parliament will assist us to identify those areas. The point you raised, Mr Singh, regarding the introduction of trading accounts, is a bit of a challenge because it would be difficult to monitor. We trust that you are going to work with us in finding a solution to this.
Regarding the issue of the Expanded Public Works Programme, phase two of the programme has a focus on increasing spending on labour-intensive programmes. I agree that these jobs are not sustainable, but research has also proved that once people have actually been in employ - no matter how short the period is - it provides them the opportunity to be able to move into other areas of employment.
The water services operating grant does make provision for the maintenance of existing water and infrastructure. We do, however, take the point and we should monitor whether municipalities utilise it according to the Act. Also, when it comes to the issue of capacity within municipalities, government is looking at the turnaround strategy. One would recall that the Minister of Co-operative Governance and Traditional Affairs tabled the turnaround strategy of the department. Part of that turnaround strategy looks at building capacity in a number of areas, amongst them financial management, infrastructure delivery and improving governance. So those are the areas that we would be looking at to ensure that that happens.
With regard to the issue of the recommendations by the Financial and Fiscal Commission, the FFC, as members would know, there is a response to those recommendations. We take the recommendations seriously. We are working together with the committee to ensure that those are taken into account.
Ms Ditshetelo raised the issue that the Bill must be consulted upon. The consultation process is the one that took place in the committee where - I'm told - the member missed a number of meetings. It would help when members take those consultative processes seriously because that is an opportunity to do just that. [Interjections.] However, we shall continue working with them even if it means visiting some of the members at home so that the consultation can take its real course!
Hon Ramatlakane raised the issue of whether Parliament would be equal to the task of oversight. I would want to believe that because this Parliament includes the hon member, it is equal to the task. All other members will work together to ensure that that happens.
Chairperson, without taking much of your time, once again let me take this opportunity to thank members for their support for the Division of Revenue Bill. I trust that we are now going to go out there and ensure that its implementation delivers what it is supposed to. I thank you. [Applause.]
Debate concluded.
Bill read a second time.