Speaker, hon members, ladies and gentlemen, let me thank you for the opportunity afforded me to address this august House on this important Bill, the Appropriation Bill, B3 of 2010.
Recognising that this is the climax of a long, democratic process in which a lot of debate has taken place and Budget Votes have been subjected to thorough scrutiny, it is important to reflect on why this is being done. In doing so, there is a need to have an appreciation of the constitutional and legal requirements, as well as the economic and political context that informs it.
From a constitutional perspective, this fulfils the requirements of section 213(2) of the Constitution of the Republic of South Africa and section 26 of the Public Finance Management Act. These sections provide that money may be withdrawn from the National Revenue Fund only in terms of an appropriation by an Act of Parliament, and that Parliament must appropriate money for each financial year for the requirements of the state.
Through this process, the provisions of section 10 of the Money Bills Amendment Procedure and Related Matters Act have been fulfilled, as no committee has proposed any amendments thus far. Notwithstanding this, Parliament needs to act with speed to ensure full implementation of the Act, including establishing a parliamentary budget office.
The economic context is both positive and negative. On the positive side, according to a National Treasury assessment earlier this year, there was an expected economic growth, though moderate, but rising gradually; better inflation outcomes within the target range; an increase in global demand for goods and trade volumes; sectoral growth outcomes and employment stabilising; expectation of a moderating current account deficit this year as compared to 2008; a lower than originally forecasted budget deficit due to a target overshoot in the revenue collection; and sustained infrastructure investment over the Medium-Term Expenditure Framework, MTEF.
Should this positive focus materialise and continue as envisaged, it provides a degree of comfort in the adoption of the Appropriation Bill before us. On the negative side, the country is still faced with massive challenges of high unemployment estimated at around 24%. As a result of poverty and inequality our Gini coefficient is said to be the highest in the world.
Some of the risks to the economy, as identified by National Treasury, are wage pressures; high oil prices; challenges associated with the implementation of mass infrastructure investment; expected moderate investment due to unused capacity; sluggish net job creation; a sizeable budget deficit remaining as a result of a slow global economic recovery; and rising debt service costs which would eat into our fiscal resources.
When debating this Bill, it is incumbent upon us, as we exercise our oversight role, to monitor the potential impact of these risks on the Budget. Of particular importance will be the need to keep a close watch on issues relating to wasteful expenditure and inefficient management of finances by departments.
From a political point of view, this is about enabling the state to meet the needs of the people as expressed in the Constitution and through the 2009 elections, which the ANC won by an overwhelming majority. The political context in which this appropriation debate is taking place is that of implementing an ANC agenda, as was mandated by the majority of South Africans.
What informs the budget-making process and the appropriation debate though, takes into account the views of all Members of Parliament and public representatives with regard to fulfilling their constitutional role of oversight and holding the executive to account.
In the past few weeks, following the state of the nation address and the Budget Speech by the Minister of Finance, all Ministers have presented their departmental strategic plans and Budget Votes. These have been debated and subjected to scrutiny in order to assess whether the money being asked for by Parliament will indeed meet the requirements of the state in the 2010-11 financial year.
Complementary to this was a thorough process by Parliament calling departments to come and account for how they used the funds appropriated for the past financial year. This is important, not only for accountability, but also to assess the extent to which the state has the capacity to effectively, efficiently and economically spend the money for the purpose it was appropriated.
That assessment gives Parliament a sense of how the funds being sought for appropriation this financial year are likely to be used, and that it will be accounted for in terms of section 32 of the Public Finance Management Act. We always need to be mindful of the fact that these are public funds, and as public representatives we are acting in the best interest of the public. In playing our oversight role - that of ensuring that the executive is accountable - we must, in the same vein, commend the signing of performance agreements between the President and Cabinet Ministers. This is indeed innovative and historical in the South African context, as it has not been done before. The signing of performance agreements will help strengthen the whole value chain of monitoring, evaluation and accountability in the implementation of our laws, especially in relation to spending public funds.
It has to be understood that the ANC, as an elected governing party, gives a mandate to government to implement its electoral mandate. This mandate is well reflected in the following government priorities: improving the quality of education; enhancing the health system; making communities safer; fostering rural development; creating jobs; and investing in local government and human settlements.
The Appropriation Bill is about how we implement these things within the framework of government programmes, and whether it can be done within the constraints of available financial resources. It is about whether the executive arm of government will use the funds appropriated for their purpose, cost-effectively and accountably.
In assessing these things, this paper will focus on three critical priority areas as articulated in our manifesto, namely job creation, infrastructure and human settlements. They are all embedded in the manifesto's plans of more jobs, decent work and sustainable livelihoods, and building cohesive and sustainable communities.
Today, the country is faced with the challenge of high unemployment. In 2009, unemployment was estimated at over 24,3% of the working-age population in the country. According to National Treasury estimates, only 44% of the working-age population had a job compared with an international rate of about 60%.
The key factor behind this is the structure of the economy that the country has inherited, commonly identified as two economies in one country - the first economy and second economy. These do not only define class divisions, but also racial and gender divisions in our society.
The first economy is characterised by a high degree of economic formalisation based on modern technology; capital intensive sectors which require highly skilled labour; unionisation and a formal labour relations system that allows for bargaining between employers and labour.
The majority of the people are trapped within the second economy, which is survivalist in nature, and is characterised by an informal and unskilled work force and poverty wages.
The first economy is also undergoing changes that are contributing to the rising unemployment rates. The combination of factors that have contributed to the worsening of high levels of unemployment are retrenchments as a result of the recession; the introduction of highly developed and sophisticated technology which requires fewer but highly skilled workers; and the move away from a traditional labour-intensive economy towards a service-oriented economy. Companies have embraced these forms of production to maximise their profits.
The danger is that the majority of those who are unemployed are the youth and people with low skills not required by the economy. High unemployment rates and relatively low wage employment are contributory factors to inequality, low levels of human development, social polarisation, poverty and high levels of crime.
In the short and medium term, unemployment and low wages lead to an increase in the demand for social security by the majority of the people and a low tax base which, in turn, adversely affect economic growth in the long term.
It is for these reasons that the ANC government has prioritised job creation and decent work as one of the most important programmes for this financial year and in the medium-term budget plans. The importance of this has been correctly articulated in the 2010 Budget Review document that states: To build a more inclusive society, South Africa needs a marked expansion in employment. This is not only an economic objective; putting more people to work will contribute to human development, income redistribution and social cohesion. Broadening economic participation assists in curbing dependence, countering crime and reducing poverty, illness, alienation, mental stress and social exclusion.
Funds that are being requested in the Appropriation Bill have to be used to address these critical challenges that the country is faced with today.
Initiatives contained in this Bill to address this challenge must be supported. These initiatives include, amongst other things, programmes such as the Expanded Public Works Programme, EPWP; skills development; improvements in public employment services; and the implementation of various strategies that are likely to promote job creation and are embedded in most departmental budgets such as those of the Department of Labour, Trade and Industry, etc.
Since the majority of poor people reside in the rural areas, the implementation of a comprehensive rural development strategy would have to be given the highest priority in our funding plans. Some of the identified interventions prioritised for funding in promoting job creation include programmes that will advance industries and services with the potential for job creation; increasing the pace and upping the content of the Expanded Public Works Programme; increasing investment in further education and training; implementing new measures to promote youth employment; and putting in place programmes and strategies that will encourage the development of co-operatives, small and medium enterprises and the spirit of entrepreneurship in general.
The implementation of some of these priority programmes identified in the Industrial Policy Action Plan 2, Ipap 2, embedded in the Department of Trade and Industry's funding plans, will assist in speeding up job-creation measures. When looked at holistically, the budget being sought through the Appropriation Bill is necessary for this work.
As part of its strategies to reduce the high rate of unemployment and create more jobs and decent work, the ANC government has identified infrastructure development as one of the key priority programmes for funding. In the Minister of Finance's Budget Speech in February, an announcement was made that, over the next three years, the public sector aims to spend R846 billion on infrastructure programmes.
It is expected that a large part of this spending would be in this year's budget requirement needs. Some of the additional funding on infrastructure as identified in the Budget Review are the R2,5 billion to increase labour intensity in public works and the R1,8 billion for the clothing and textile industries. The implementation of these programmes will have a huge impact on the taking off of the country's new economic growth path and increase the potential to reduce the current rates of unemployment and poverty.
The ANC government is committed to building cohesive and sustainable communities to advance the Freedom Charter's call that there shall be houses and security for all.
This is also enshrined in the Constitution of the Republic as a human right in the Bill of Rights. The ANC manifesto stipulated that, through programmes for housing, social security, as well as sports and recreation, the aim is to build a better life for all.
The ANC government has put a priority on increasing access to security and decent housing for all. It is also committed to strengthening local government as a crucial sphere of government where the majority of the population has frequent and direct contact with government. It is recognised that local government is critical for service delivery in the country.
In their Budget Vote, the Department of Human Settlements prioritised the acceleration of the delivery of houses, access to basic services and more efficient land utilisation as their core programmes needing funding.
The Department of Co-operative Governance and Traditional Affairs has prioritised building an accountable and efficient local government. Their focus on funding plans is to meet community needs; provision of clean, responsive and accountable administration; improving performance and professionalism; and support for municipalities, given the importance of local government in service delivery and the fact that a lot of problems relating to the capacity of municipalities to deliver services have been identified in the past.
In conclusion, this Bill had to be assessed against the priorities of the ANC government and its funding priorities. The budget requirements, as stated in various government departmental Votes proposed for appropriation in this Bill, are important and urgent. The release of these funds will advance the implementation of the plans for change.
As the ANC, we need to ensure that this Budget is used effectively and efficiently to achieve the mandate to pursue transformation, which has been given to us by the people. In adopting this Bill, we are going to intensify our oversight role in Parliament. We must vigorously ensure consistent monitoring and evaluation of the implementation of the programmes funded through the appropriation. As legislators, we must ensure that all the laws that we have put in place, such as the Money Bills Amendment Procedure and Related Matters Act and others, are indeed enablers of a developmental state to achieve the goals of speedy service delivery and development.
For these reasons, the ANC supports the passing of the Appropriation Bill. Thank you. [Applause.]
Mr Speaker, a budget deficit of about 7,3% was expected at the end of the 2009-10 financial year. Sars, however, managed to do their trick once more, and a lower budget deficit of 6,8% was in fact achieved. They deserve our congratulations.
In addition, we managed a higher growth rate than expected, inflation was reduced, and a sensible monitoring policy was followed by the Reserve Bank. Although these factors give rise to optimism, outside international factors such as the declining value of the euro, due mainly to financial problems in Greece, could quite easily lead to a second round of recession worldwide.
We should therefore make sure that we are ready for such an eventuality by being absolutely prudent in our spending patterns. This applies even more so in the case of government departments and institutions.
When looking at the spending patterns of departments for the entire 2009-10 financial year, it is disconcerting to note that many departments fail to spend the budget amounts allocated to them, and that they continue to spend as much as possible in the fourth quarter of the financial year so as not to have a reduced allocation made to them in the next financial year.
Equally disconcerting is the continued misappropriation of funds by way of corruption as well as the recurring trend of incurring wasteful and unnecessary expenditure. No wonder the DA's wasteful expenditure monitor exceeds the R1 billion mark already.
Of concern also is the number of jobs lost in the economy and the inability of the Department of Public Works to spend all available Expanded Public Works Programme, EPWP, funds for job creation in respect of their EPWP incentive schemes. Some R30 million of this incentive programme remained unspent at year-end.
Only 68 municipalities out of a total of 283 received monies from this fund. It is clear therefore that the oversight role of Parliament, particularly by its portfolio and standing committees, will become of utmost importance in the 2010-11 financial year to ensure that money is spent prudently and wisely.
One of the instruments Parliament and its committees will be able to use to good effect to ensure proper oversight is the Money Bills Amendment Procedure and Related Matters Act, the content of which we have recently explained to hon members in a number of training sessions.
This Act, signed into law by the hon President during April last year, provides the right to Parliament - for the first time - to amend the budgets of departments through the various portfolio committees as well as through the Standing Committees on Finance and Appropriations, provided, however, that such amendments fall within the approved fiscal framework.
The Act provides an opportunity for Parliament to control the unnecessary roll over of funds, and expenditure outside the declared priorities of government; to curb unnecessary and wasteful expenditure and over- and underspending on budgets; as well as to ensure adherence to the Public Finance Management Act for funding roll-overs.
The Act also provides for the establishment of a budget office to give assistance to portfolio committees, but in particular to the Standing Committees on Finance and Appropriations to fulfil their mandate as prescribed by the Act. A director is to be appointed in terms of the Act to head the budget office.
The Act has been law for more than a year now, but a director has not been appointed yet. This is despite the fact that the advertisement for filling the position was approved by a joint sitting of the finance and appropriations committees in February this year.
Despite the fact that the appointment is crucial for proper assistance to committees to provide effective oversight, the ANC instead formed what they call "a political task team" to deal with the matter. This so-called "political task team", consisting of ANC members, only came up with the idea of seconding current parliamentary staff to the budget office before the director of the budget office is appointed.
When asked what the function of these seconded personnel would be and who would supervise them in the interim, the Secretary to Parliament advised that they were to arrange office space, buy furniture and computers, etc, so that the new director would not be bothered with such trivial matters when he assumed office.
Needless to say, there was no organogram for the budget office, and the Act clearly prescribes that the director shall be part of compiling such an organogram. The seconded personnel would therefore have embarked on the procurement of offices, furniture and computers without knowing the number of personnel involved and therefore the quantities required.
Fortunately the joint sitting of the finance and appropriations committees did not agree with this hair-raising scheme. The result, however, is that nothing has happened since and the advertisement to fill the position has still not been inserted a year after having been signed into law by the President.
One wonders whether the proposed secondment of parliamentary personnel was an attempt to create vacancies to which superfluous ANC caucus employees could be deployed, or whether the proposed independence of the budget office provides a threat to centralised political control or maybe even endanger the position of certain parliamentary staff members.
At the time when committees and Parliament consider the Medium-Term Budget Policy Statements, MTBPS, the advice and recommendations of the budget office will be of immense value, and it is a pity that priority attention is not given to the establishment of the said office.
It is at the MTBPS that a major portion of the rollover of funds takes place. It would unfortunately also appear that certain departments are not yet aware of the existence and prescripts of the Money Bills Amendment Procedure and Related Matters Act.
I make the latter statement based on the fact that the Director-General of Labour wants to increase his budget by a huge R1 billion without reference to anybody and without quite knowing what the purpose of the additional funding would be. When one hears this, the need for parliamentary oversight becomes clearer.
The example quoted is made more serious by the fact that the director- general in question is also the president of the Black Management Forum of South Africa and should therefore be more knowledgeable about management and South African laws than the rest of us.
Although he is supposed to be an apolitical public servant, we regrettably might be forced to pardon him as he is probably so busy with expressing his own political opinions in his capacity as the president of the forum that he has limited time to attend to the poor showing of the Department of Labour!
I thank you and wish Bafana Bafana all the best. [Applause.]
Hon Speaker, hon members, the Financial and Fiscal Commission's submission has interrogated government's policy priorities for 2010. It has also examined growth trends and the utilisation of national revenue funding. It concurs with government on its main priorities and thus gives support for the Appropriation Bill.
It is, however, distressing that 16 years after the advent of democracy, South Africa has the unenviable record of being the most unequal society in the world. The gap between the rich and the poor as shown by the Gini coefficient is forever widening.
It is not surprising therefore that unions' strikes stem in part from the disparity of earnings between the upper echelon and ordinary workers. The class divide is going to lead to a class conflict. One does not have to be a prophet to recognise this. The question is whether we have the will to alter the situation on time.
The government's key public spending priorities for the year are education and skills development, health care, job creation, infrastructure, rural development, justice, crime prevention and policing.
There has been little change since 2008. Skills development has been appended to education. We fully agree that skills development is a very important component of education. Job creation has been prefixed to infrastructure development. We also agree that considerable emphasis should be placed on job creation.
However, basic household services have been removed from the government's previous priority list. Rural development has taken its place. This is surprising as the issue of household services remains as contentious as ever. In Cope we agree that rural development has to come onto the priority listing but not at the expense of household services. This is fundamentally wrong. Even at this stage, it would be appropriate for government to list six extraordinary priorities instead of the basic, usual five. We urge government to do so and to return basic household services to the list as the sixth item.
I now come to debt serve costs as this is the fastest growing item on the budget line. The Financial and Fiscal Commission has warned about the government's use of debt to fund current expenditure, such as remuneration of public servants.
Like the commission, we too are concerned about the increase in debt service costs relative to other budget items, as well as the rapid increase of the public sector wage bill. Government must drastically restrict long- term borrowing because what has happened in Greece should serve as a timely warning to us in South Africa. Debt has a tendency to become unmanageable very quickly, especially as circumstances can alter very quickly.
At a time when economic conditions in the world are as uncertain as they are today, it is very important to curb debt rather than to roll it over as government is intending to do. I believe that red lights should start to flicker. As the custodians of the national purse, this august House should start to become very concerned. The national government's net loan debt will have risen from R526 billion last year to R1,3 trillion in two years time. Consolidated government debt service costs will therefore rise from 2,4% of the gross domestic product, GDP, or R57,599 billion this year to 3,2% of the GDP, or R104 billion in 2012-13. At that stage, the government debt service costs will be a staggering R104 022 billion.
The National Assembly must think very seriously about the impact of this spiralling debt service costs as it must do everything in its power to bring the debt down. As I see it, South Africa is never going to be able to enjoy a debt-free status again. While the national government's net loan debt is growing, so is expenditure.
Only International Relations, Public Enterprises, Arts and Culture, Sport and Recreation and Communications reflected a slight decrease in their budgets. All of the other departments have increased their budgets. This means that the hard pressed South African citizens must prepare for substantial tax increases.
Likewise, whichever party that comes into government in 2014, will have a note from Minister Gordhan left on the table saying, "Sorry but there is no money left in the Treasury. Good luck!" Remember that this is what happened just a few weeks ago, when the labour government left office in the United Kingdom.
It is an economic truism that large-scale debt, driven by current consumption, will compromise economic growth and destabilise the domestic financial system. It would have been different if debt was being used to finance capital assets. Unfortunately, this is not so and that is why the country is going to face fiscal uncertainty.
There is another matter of some importance on which we would like to get clarity from the Minister. This year, the national estimates of expenditure have not reflected government's expenditure on consultants. Does this mean that as of this year, consultants will no longer be appointed?
That would be a very progressive development considering how government employees leave by one door and return straightaway as consultants through the next door. Even though this is not allowed in the code, the practice is now well established.
It would therefore be of great relief to know that expenditure on consultants is not reflected in the estimates of national expenditure because departments may no longer employ consultants.
Cope would also like to hear from the Minister about procurement processes as these have been thoroughly corrupted by the ANC-led government. Although tax compliance certificates are required by law, departments are dispensing with them at will without any consequences. The Minister can look at how the Department of Correctional Services has generally subverted the law in this regard. Tender adjudication processes have been bent crooked and accreditation processes are twisted. For how long must the taxpayer patiently countenance such criminal behaviour inside government?
I now come to the question of funding for the public transport sector. A coherent fiscal strategy is lacking. Can we ask the Minister when this deficiency is likely to be remedied?
Finally, I come to the question of the poor in South Africa. Three factors that are making the present global economic crisis more severe for our poor are escalating food prices, rising electricity tariffs, fuel costs and joblessness.
Constitutionally, the poor are not passive victims of poverty and mere recipients of state grants and services. They have to be actively assisted to a better life through education, jobs and services.
We are seriously concerned about the fiscal position in which this country finds itself. We insist that debt has to come down as the cost of servicing that debt will impact negatively on taxpayers in particular. Thank you. [Applause.]
Speaker, the distribution of funding from the National Revenue Fund to the state departments is both critical and central to the economic and social development of our country. It is therefore imperative that this distribution is properly planned and implemented strictly according to plan, as we are dealing with finite fiscal resources and cannot afford the luxury of second-guessing ourselves.
Central to the point of effective distribution is the concept of value for money. Many of our state departments still receive qualified audit reports from the Auditor-General's office indicating poor management of funding, which results in ineffective service delivery. It seems as if a culture of general unaccountability regarding fiscal funding is being allowed to develop in certain departments and this is most worrisome to the IFP.
Tender fraud and mismanagement must be identified within the departments and those responsible must be prosecuted to the fullest extent of the law. It seems as if very few staff members in state departments are ever taken to task over fraudulent mismanagement of fiscal resources.
Lack of a necessary skills base in some departments is also a major contributing factor to poor service delivery, and this must be addressed as a matter of urgency. In addition, a culture of discipline, responsibility and accountability must be inculcated within the departments and staff members found in breach of their duties must be disciplined.
Transfers to state-owned entities should be strictly monitored as there does not seem to be much supervision over these funds. They seem to be dissipated with the greatest of ease with little or no accountability attached thereto, an example being the Commission for Gender Equality.
State-owned entities must take a long, hard look at their salary structures. The fat needs to be trimmed off CEO and senior management salaries so that there is more equitable distribution of funds for the average worker. This will result in fewer strikes, a more content workforce, effective service delivery and fewer service delivery demonstrations by the public.
Whilst the IFP respects the rights of workers to partake in legitimate strike action, we question the appropriateness of the timing 15 days before the World Cup.
The Money Bills Amendment Procedure and Related Matters Act provides us with a golden opportunity, which will allow the voices of our citizens to be heard through their respective public representatives in terms of the allocation of resources. Service delivery must be first and foremost on the agenda.
In the past, we have been hampered by issues of over- and underspending, which resulted ultimately in the needs of the people on the ground not being met. This Act will empower us as Members of Parliament to correct these imbalances.
Finally, we would like to task the Ministers and senior management of the various departments with taking full ownership and with being accountable to the people of this country for the funds that they receive from the fiscus.
They should ensure that those funds go where they are supposed to go and do what they are supposed to do. The IFP will support this Bill. I thank you. [Applause.]
Speaker, this year's Appropriation Bill was formulated at an extremely difficult economic time in our country's history. The whole world is experiencing a massive economic upheaval, with millions of people having lost their livelihoods across the globe.
The recent crisis in the Eurozone has also shown that the tentative global recovery of the past year has mainly been propped up by unsustainable deficit spending. We therefore need to be alive to the fact that our own recovery, as shown by the growth figures yesterday, is constantly subjected to threats outside of our control. The factors that are within our control, however, are the allocation and spending of our budgetary resources.
In this regard, the ID believes that you have done a good job, Minister, of ensuring that different priorities are being met during this difficult period. The ID welcomes the fact that you have chosen not to decrease social welfare expenditure during this time, and that finally the extension of the child support grant to all children under the age of 18 years has been implemented. This is something that the ID has called for for a number of years.
The ID also welcomes the announcement that you will be considering the introduction of a wage subsidy for youth, but we would have liked to have seen this implemented this year rather than next year.
The ID would also liked to have seen more money being set aside for the gradual implementation of the much-debated national health insurance scheme as the gross inequalities in our health sector need to be urgently addressed. In addition, the ID is concerned that not enough money has been set aside for the building up of specific green industries. We cannot keep debating this issue without actually putting forward the funds and policies to build up this potentially huge growth sector.
The ID does, however, welcome the fact that this year's Budget has started to close the financial taps on those nonperforming state-owned enterprises, particularly those that have become a major drain on the fiscus. A major challenge that still needs to be confronted, though, is how we are going to continue to fund the huge infrastructural needs of our country, particularly in the areas of energy, water and sanitation.
For too long we have lived in a false economy where we have not invested enough in maintaining and upgrading the essential services of our country, and the effects of this are starting to be seen throughout our society.
Allocating the money, however, is only one side of the equation. The ID hopes that you will also live up to your promise of ensuring that we get value for money from every cent of government expenditure. This includes ensuring that no money is lost through corrupt practices, nor is siphoned off into the coffers of the ruling party under the guise of investment front companies like Chancellor House. With this proviso in place, the ID supports the Appropriation Bill. I thank you. [Applause.]
Deputy Speaker, hon members, Ministers present in the House, the Bill before us represents the backbone of government's expressed policy for the coming year. Between what we approved here today and what is actually delivered in services, there is a vast gulf.
The failure to turn today's Budget into tomorrow's service delivery is in essence the cause of a spate of violent community protests. As I have indicated earlier in the budget cycle, conditional grants do not resolve the problem of the failure to spend budgets appropriately. 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 cronyism and tender fraud.
National government will simply have to improve its ability to monitor the spending of provincial and local governments. It also means that national government will have to radically improve its own track record when it comes to responsible spending and meeting delivery targets. We need leadership from the front.
The continued torrent of poor management and widespread critical vacancies must be addressed immediately. It is these basic things which undermine the beautiful intentions of the budget process. It is also these things that create the conditions for corruption to flourish.
We are especially concerned about the numerous state-owned enterprises and entities which draw heavily upon the national revenue for support yet also have a terrible track record. The SABC, to name an example, continues to benefit from taxpayer relief while it stumbles from one management crisis to another.
Regrettably, this is true of many state-owned enterprises and agencies. Eskom is a particularly troubling case. It is a drain on the fiscus. It has undermined our economy with its failure to maintain and invest in infrastructure. It is worsening inflation with its escalating rates.
These are illustrations of a particular culture that has seeped into every facet of governance. If we do not face up to this culture and replace it with one that celebrates competence and dedication, all policy and budgeting will be for nought. The UDM supports the Bill. Thank you. [Applause.]
Xandla xa Xipikara na Yindlu ya wena leyo hlonipheka, ndza mi losa eka ndzhenga wa namuntlha. Ndzi lava ku burisana na n'wina swintsongo mayelana na matirhelo ya mikavelo ya mali hi tindzawulo ta mfumo. Komiti leyi yi xiyaxiya, ku landzelerisa na ku vona loko mali leyi kunguhateriweke tindzawulo yi tirhisiwa hilaha yi pimanyetiweke hakona. (Translation of Xitsonga paragraph follows.)
[Mr D W MAVUNDA: Deputy Speaker and your august House, I salute you this afternoon. I want to discuss with you a little bit concerning the spending of allocated money by government departments. The committee oversees and monitors whether the money which is set aside for the departments is spent as budgeted.]
It should also be emphasised that this Standing Committee on Appropriations was established in terms of section 43 of the Money Bills Amendment Procedure and Related Matters Act, Act 9 of 2009, with the powers and functions conferred to it by subsection 4 of the Act and the Constitution. The Money Bills Amendment Procedure and Related Matters Act set out, amongst other things, the legislative framework for the amendments to the Appropriation Bill. In terms of this Act, the committee has to consider and report on spending issues, actual expenditure published by the National Treasury and amendments to the Division of Revenue Bill, the Appropriation Bill and the Adjustments Appropriation Bill, among other things.
It is, therefore, noted with great concern that the government in general reported an overall underexpenditure of R5,8 billion or 1,3% of the entire national Budget for the 2009-10 financial year. The general observation indicates that the bulk of this underspending emanates from the current payment and capital expenditure. However, the 2010-11 Budget has increased by R2,6 billion, or 0,6%, from the 2009-10 to the 2010-2011 financial year.
Be that as it may, if government wants to realise the strategic priorities arising from the 2009 state of the nation address of the hon President, the Appropriation Bill committee recognises that it will have to be effective in its oversight and other functions, and it will have to monitor the achievement of government goals for economic development and service delivery. Taking into consideration the Appropriation Bill issues raised during the public hearings and section 32 reports - the in-year monitoring instruments for government spending - it has been established that many departments do not fully comply with the range of prescribed legislation, rules, and procedures - amongst other things, the Public Finance Management Act and the Public Service Act.
Picking up but just a few departments like the Department of Co-operative Governance and Traditional Affairs, which is regarded as the central and integral instrument of government, it has, in as far as service delivery is concerned, been allocated approximately R43,9 billion in the 2010-11 Budget compared to the R36,5 billion for the previous financial year.
The department spent R36 billion, which is R513 million less than the allocated amount in the 2009-10 financial year. The department reported underspending in all economic classifications during 2009-10 with capital expenditure reflecting the major underspending. The high levels of underspending are of concern since capital spending and transfer payments form part of government instruments which are meant to create jobs and enhance service delivery.
Having said that, the committee has also learnt with great concern that it has lost about R8,7 million in the 2009-10 financial year, according to the Public Service Commission, PSC, due to suspension of personnel with pay on misconduct and misappropriation of public funds.
This means that with so many departments, there is a lack of compliance with the Public Service Act which prescribes, amongst other things, that a case of any misconduct, including suspension, must be concluded within 60 days. However, there are departments that have in some other cases taken up to approximately 250 days to finalise formal disciplinary processes.
We, therefore, in this committee urge all the departments to comply with the Public Service Act in all respects in order not to misuse public funds unnecessarily. However, this committee, the members of the ANC in particular, has learnt with great interest of the passion, commitment and concern of the Minister of Co-operative Governance and Traditional Affairs with regard to all that has happened at local government level, particularly in various municipalities.
The ANC is waiting with great anticipation for the turnaround strategy model that will strengthen and ensure that government funds are utilised appropriately, effectively and efficiently by highly skilled, suitably and highly qualified personnel who will be placed in the right posts and be equal to the task.
We hope that the turnaround strategy, as alluded to by the Minister himself, will design programmes with proper planning and control of state funds, with monitoring and evaluation being the order of the day. The committee is also impressed by the fact that the Ministry is aware of the challenges faced by both municipalities and provinces, and has come up with a clear programme called "Operation Clean Audit 2009-14" - which also clearly outlines those challenges and its problems - and has also come up with a plan to deal with those challenges that are hampering service delivery.
We appreciate the establishment of the new Department of Co-operative Governance and Traditional Affairs with Dr Masenjani Sibanda as the director. It is noted with appreciation that from the moment of colonial occupation and the apartheid regime, traditional leaders have been at the forefront of the struggle against the dispossession of their land, subjugation, oppression and discrimination by those forces.
It was not by mistake that traditional leaders were central to the creation of the ANC in the year 1912, which culminated in prominent and progressive leaders like Chief Albert Luthuli being elected as the president of this revolutionary movement.
As we speak, in the democratic South Africa together with the leaders in government, we do realise that our enemies are no longer colonialism and apartheid. They are unemployment, crime and poverty that the majority of people in this country have been subjected to since the introduction of the so-called Land Act of 1913, which drove black people to the dry areas called reserves, later named homelands; as well as the Bantu Administration Act of 1938 which stripped away the powers and authority of our kings and chiefs and subjected them to the control of white supremacy then called the Governor-General.
It is our view that the new department will - in consultation with traditional leaders and structures like the Congress of Traditional Leaders of South Africa, Contralesa, and the House of Traditional Leaders - draw up programmes leading to proper land allocation and administration, and local economic development leading to service delivery.
The second example is the Department of Rural Development and Land Reform. This committee has learnt, again, that we are still experiencing the legacy of the Land Act of 1913, which is still prevalent in landownership in our country; in the rural areas in particular, where farmworkers are still trapped by the injustice of this legislation. It is noted with great concern, because land is an asset for any societal development, and it is central to rural development.
The 2010-11 Appropriation Bill proposes a budget allocation of R6,8 billion to the department, which is an increase of R365,2 million as compared to the 2009-10 Budget. The department was allocated R6,4 billion in the 2009- 10 Budget. According to section 32 published by the National Treasury, the department has spent R5,9 billion of this budget, which reflects an underspending of R536,4 million at the end of the fourth quarter.
However, the Standing Committee on Appropriations does not encourage these practices that are being practised by other departments, like viraments, shifting of funds within the budget and rollovers. As a committee, we do not encourage such practices.
However, as the ANC, we have learnt with great disappointment that most of the land reform legislation has not benefited the majority of our people, and continues to keep them on the sidelines of economic participation. For example, the agreed principle of willing-buyer, willing-seller has no bearing at all. Instead, it sucks up all the money allocated to restitution and land redistribution programmes.
We have also noted with concern that at the end of the 2008-09 financial year, government had delivered approximately 2,9 million ha of white-owned agricultural land to land reform beneficiaries. This is just about 6% of the 8,2 million ha that government has planned to transfer by 2014.
Even though the initial planned transfer of 1,5 million ha of land was reduced by approximately 40,54%, the department only managed to transfer 443 600 ha due to the escalating land price that eroded all the buying power of the budget allocated to this department.
The attitude of most white farmers in this country, who inflate their prices more than the market value when selling farms to government, remains a serious challenge; hence, as the ANC, we fully support the Minister of Rural Development and Land Reform when calling for progressive legislative instruments that will ensure that there are proper plans and programmes leading towards rural development, and which will make it viable for the department to buy farms at reasonable market value prices.
We also call on ... [Time expired.]
Minister Gordhan se department verdien om geluk gewens te word met hul prestasies. Die feit dat die Suid-Afrikaanse Inkomstediens sy invorderingsdoelwitte oorskry het, wys dat die departement wel hard werk. Dit dui natuurlik ook daarop dat die Suid-Afrikaanse belastingbetaler wil h dat die land moet werk, gegewe hul bydraes.
Daarom is die omgekeerde ook waar, en dit is dat die regering 'n besondere verantwoordelikheid het teenoor die belastingbetaler. Dit vind vergestalting in die aanwending van die belastingfondse op 'n sinvolle en effektiewe wyse. Dit behels enersyds die neem van die korrekte beleidsbesluite en andersyds die effektiewe toepassing van di besluite, met inbegrepe van die uitwissing van korrupsie.
Die regering het, wat die VF Plus betref, wel in die regte rigting begin beweeg rakende ekonomiese beleid, maar ons moet u maan dat die broodnodige ekonomiese groei en werkskepping wat ons land wel nodig het nie gaan gebeur deur die grootskaalse intervensie van die regering alleen nie. Die belastinggeld moet grootliks aangewend word om 'n omgewing te skep wat die entrepreneurswese sal dien as synde die grootste werkskepper.
Ons glo daarin dat Afrikaners en ander minderhede die regering kan bystaan indien die regering gewillig sal wees om die strukturele hindernisse van regstellende aksie en swart ekonomiese bemagtiging te begin hersien en derhalwe die speelveld waarlik gelyk te maak.
Daarby wil ons ook die Minister en sy departement versoek om aandag te gee aan die volgende sake van kommer: die publiek sou graag eerstens wil weet of die Inkomstediens steeds voortgaan met hulle ondersoek teen Julius Malema. Ons verstaan sy belasting is 'n private aangeleentheid, maar indien die ondersoek sou bevind dat daar onrelmatighede bestaan, veral in die lig daarvan dat sy maatskappye gebruik maak van staatsgeld en substandaarddienste lewer in daardie verband, het die publiek ook 'n reg om te weet wat die uitslag van daardie ondersoek is. (Translation of Afrikaans paragraphs follows.)
[Adv A D W ALBERTS: Minister Gordhan's department deserves to be congratulated on their achievements. The fact that the SA Revenue Service has exceeded its revenue collection goal indicates that the department is working really hard. This also clearly indicates that the South African taxpayer would like the country to be functioning, given their contributions.
Hence the reverse is also true, and that is that the government has a particular responsibility towards the taxpayer. This is personified by the meaningful and effective utilisation of tax revenue. This involves, on the one hand, taking correct policy decisions and, on the other hand, the effective implementation of these decisions, especially with regard to the eradication of corruption.
The government, according to the FF Plus, is moving in the right direction with regard to its economic policy, but we have to caution that the much- needed economic growth and job creation are not only going to come about through massive government intervention. Taxes should mainly be utilised for creating an environment that would serve the entrepreneurial sector, since it is responsible for creating most jobs.
We believe that Afrikaners and other minorities would support government if it would be willing to review structural obstacles such as affirmative action and black economic empowerment to consequently level the playing field.
We would also like to request from the Minister and his department to give attention to the following matters of concern: firstly, the public would like to know whether the SA Revenue Service would be continuing its investigation into Julius Malema. We know that his tax situation is a private matter, but if the investigation concerns irregularities, especially in the light of the fact that his company is using public funds and delivering substandard services in this regard, the public also has a right to know about the outcome of that investigation.]
Secondly, and most importantly, it is becoming very evident that the South African taxpayer is being overburdened by the demands of the state on his or her income. The middle class is struggling, yet the government increasingly levies more taxes or charges upon the everyday working person to the degree that this economy can be constricted into a backwards slide.
At all levels of government, new taxes are born without it necessarily being called taxes. An example is the new road-use tax in Gauteng. Existing tax rates are being increased beyond affordability with many people now facing the prospect of losing their properties due to local government charges.
This is clearly nonsensical. Therefore, we appeal to the Minister to take stock of all the taxes bearing down upon taxpayers and to rework the system into a more equitable form that will allow for entrepreneurial growth in South Africa. Otherwise, we are fast approaching a communist tax system and fascist economy.
The Minister has always shown prudence in the face of adversity, and we trust he will do so again. Thank you very much.
This is hon Mkhulusi's maiden speech. You are welcome. [Applause.]
Deputy Speaker, hon Minister of Finance, hon members and guests, the Appropriation Bill in its allocation makes education one of the key priorities of the ANC government. Basic education that is free, compulsory and universal is the overarching vision that forms the ANC's education policy, and it is people's education for people's power.
In following this vision, the ANC has always advanced towards ensuring that education is becoming free, compulsory, universal, and equal for all children. The 2010 Appropriation Bill should therefore enhance the implementation of the ANC's decisions towards the realisation of the overarching vision. The Bill will go a long way in promoting and supporting mathematics, science and information technology through bursaries to be offered to teachers in these areas.
The appropriations to education, human resources and management expenditure increased at an average annual rate of 134,8%, from R38,85 million in 2006- 07 to R498,6 million in 2009-10. This growth is due mainly to additional funds allocated for the supply of newly trained teachers from 2007-08.
Prioritisation of these decisions by the ANC is critical, as there are very few teachers of these subjects in the country. Untargeted training of educators will not be able to deal with the challenge of scarce skills shortages in general and shortages of teachers in mathematics, science and information technology in particular.
Coupled to this is the recruitment of scarce skills such as mathematics and science from foreign countries, whilst a review of current recruitment and retention strategies and its effectiveness has been made. Clarity about the intention to implement a decision to recruit scarce skills from foreign countries is lacking. The ANC decided that government should recruit the skills South Africa does not have from foreign countries in order to raise the internal skills capacity through an increased number of well-performing learners who will end up not only with a university education, but with university degrees in mathematics and science.
During the 2008-09 financial year, 40% of both primary and secondary schools were declared no-fee schools. Approximately 60% of the 12 million learners in the system are currently benefiting from the system. The policy of declaring no-fee schools, beginning in January 2007 and extended in 2008, meant that by 2008, 14 264 schools were not required to charge school fees, thus removing the barrier to accessing education.
By 2010, there are supposed to be 8 million learners in approximately 19 933 no-fee schools. It is clear that the department is making a commendable effort to implement this decision. This has been the vision of the ANC for years: a free, compulsory and universal education for all.
The no-fee schools are not only ensuring access for all learners but are also relieving many poor parents of the burden of having to pay school fees for their children and thus releasing funds to be used to secure food and other necessities. There is poverty alleviation in action, and it contributes to enabling South Africa to meet the Millennium Development Goal of reducing extreme poverty by 2015.
The Appropriation Bill has to ensure that schools serving the poor are adequately provided with education resources. Numerous projects have been initiated to improve teaching and learning in disadvantaged communities, which are concentrated in the rural areas.
The development of school infrastructure in respect of quality improvement, development, support and upliftment has ensured that 15 503 schools are benefiting from this programme. There are still challenges remaining in respect of the provision of basic services to rural schools. A national framework for developing education in rural areas was developed and is being refined in consultation with relevant stakeholders, including, amongst other things, the Nelson Mandela Foundation and the United Nations Children's Fund, Unicef.
The provision of adult basic education and training through the Kha Ri Gude Mass Literacy Campaign launched in February 2008, was aimed at meeting the Millennium Development Goals of enabling 4,7 million adults to become literate between 2008 and 2012. By 2009, the Kha Ri Gude campaign enabled 613 637 learners to attend classes and had created approximately 40 000 short-term jobs.
A combined total of 1 700 blind and deaf learners were reached through employing about 190 Braille and sign language educators. Government's commitment to the elimination of illiteracy is demonstrated by the fact that expenditure has grown, through the appropriation from the fiscus, from R17,1 million in 2007-08 to R443,2 million in 2009-10. The expansion of early childhood development has been advanced a step further through the 2010 Appropriation Bill. By 2009, there was a 77% national enrolment for Grade R learners at public and independent primary schools, with a further 200 000 learners in classes at community sites. Bags and reading books were distributed to 6 750 Grade R and Grade 1 learners in the Free State and the Eastern Cape as part of the "Drop All and Read Campaign". A total of 2,5 million Ithuba books in all 11 languages were delivered to 2 000 schools as reading material for the intermediate phase learners.
By 2014, all children will participate in Grade R. In this regard, the national funding norms for Grade R will be reviewed to ensure that they consider key curriculum-related matters such as teacher qualifications and class size. The review is expected to be complete by 2011. Through successive Appropriation Bills, the expenditure for early childhood development has grown from R3,9 million in 2007-08 to R11,4 million in 2009- 10. The growth is indicative of the intention of the ANC government to expand the early childhood development provision.
The efforts to ensure that all early childhood development centres are standardised to offer the same quality of knowledge to all children and are mainstreamed to enable the Department of Basic Education to exercise monitoring and oversight over them, are very encouraging. This will ensure that all South African children are provided with the necessary learning foundation by 2014. In terms of this Appropriation Bill teachers are assisted in respect of detailed daily lesson plans and easy-to-use workbooks in all official languages. During 2010, enough workbooks for Grade R to Grade 6 learners, accompanied by teacher manuals, were distributed to schools.
From the beginning of 2011, workbooks will be used by learners from Grade R to Grade 9. Successive Appropriation Bills have seen the appropriation grow from R750 million in 2009-10 to R913 million in 2010-11 and R1 billion in 2011-12. It will ensure that teachers do not spend a lot of time preparing for lessons, but that their time will be spent on the core business of teaching and learning.
On the other hand, the workbooks in all official languages also give expression to the constitutionally entrenched right for everyone to receive an education in the official language of their choice in public education institutions wherever it is practically possible. Learners who learn in their own language from an early age have a stronger potential to understand the essence of what they are taught than those who learn in a second language.
The Constitution calls upon government to heal the divisions of the past and establish a society based on democratic, social justice and fundamental human rights. In this regard, by ensuring that the poor are adequately provided with educational resources, the ANC is demonstrating that the children of the poor can be emancipated from poverty through education.
This fight against poverty not only gives us an opportunity for a better life for all, but contributes towards the realisation of the Millennium Development Goals to reduce extreme poverty.
Let me now turn to higher education in the context of the Appropriation Bill. Of key concern for the ANC is that higher education institutions, which are highly subsidised by the state, are not being closely monitored to ensure that graduates emerging from them, in the main, are equipped to respond to our society's socioeconomic needs. The funnel effect in the higher education institutions, in which the quantitative input is higher than the throughput which, in turn, is higher than the output, deserves more focused attention.
The ANC seeks to build a national democratic society through a developmental state that is technically capable of driving the national agenda and is organising to rally and unite behind that agenda. Such a developmental state has to be capacitated through a broadened skills base that has the capacity to shoulder the developmental imperatives in areas such as infrastructure development and maintenance.
In that regard, adult education, training and skills transfer have to be prioritised. Further Education and Training colleges, FET Colleges, should also be reoriented to produce more of the critical skills that are necessary for the pursuance of the new economic growth path which is job driven.
The need to develop skills for rural development, for advanced technological capabilities, and for growing the economy is critical. This must inform the skills strategies that should support the engine of the new growth path. At the same time, we must facilitate institutional linkages that are flexible and dynamic to meet the differentiated and overlapping demands and opportunities for skills across the sectors of the economy. We should do so by directing skills development resources available to the state so as to meet the dynamic needs efficiently and effectively. The active support of stakeholders, labour, the community, and business, in particular, must be one of our central concerns.
One of the priorities of the ANC-led government is the creation of decent work and sustainable livelihoods, thus reducing unemployment and extreme poverty to concomitantly respond to the Millennium Development Goals. Research demonstrates a direct link between unemployment in South Africa and the skills deficit, thus revealing a stark mismatch between the supply and demand of skills. Employers have often indicated that knowledge, skills, and capacities that people bring from their educational experiences are insufficient for the needs of the workplace.
Commitment to vocational training should be demonstrated in resource allocation to FET colleges and Sector Education and Training Authorities, Setas, which are vessels through which students in general and adults, in particular, receive skills that are needed to drive the engine of the new economic growth path.
We must do more to capacitate FET colleges and Setas to drive the agenda of skilling the South African society. This will include capitalising these institutions, in order to make them attractive as providers of skills and also to create relationships with business and other employers, to ensure work-driven training and immediate systemic placement of students who exit the training system.
The January 2010 ANC NEC lekgotla resolved that FET colleges should be geared towards promoting scarce skills. The FET colleges have, in the recent past, been focusing on the provision of soft skills which are either subordinate or equip students for a subsistence that marginally contributes to the economic life of the community. This needs a rethink in the light of our massive infrastructure development programme and the skills needs that this brings with it.
In conclusion, this Appropriation Bill must be in line with the ANC's 2009 manifesto priorities. The ANC government will increase graduate output in areas of skills shortages, and this will include measures to streamline Setas and other institutions to address the existing and forecasted skills shortages, as the manifesto requires. The ANC supports the Appropriation Bill of 2010. I thank you. [Applause.]
Order, hon members! Before I call hon Rabie, I want to take this opportunity to acknowledge the presence in the gallery of a delegation from the European Parliament, led by Mr Michael Cashman. The delegation is attending the SA-EU 15th Inter-Parliamentary Meeting. You are all welcome. [Applause.]
Hon members, I also want to make an appeal to those members who choose to talk and not to listen, it becomes very distracting. Even here I can't hear what the speaker is saying. If you choose to talk, do so quietly so that it doesn't distract other people, please.
Deputy Speaker, hon Ministers and hon members, South Africa is emerging from a recession in which approximately 1 million South Africans have lost their jobs. Economic growth in South Africa, during the last ten years, was basically jobless, and I think the hon Professor Ben Turok will agree with me on that.
The ANC's economic policy and its Budget in 2010-11 use the phrase, "a developmental state". I think they use it very extensively. They also use "a paradigm of change", and I quote: ... a new growth path that will result in the eradication of widespread poverty and the present unacceptable levels of unemployment.
Whether it would happen under the present economic policy of the ANC is questionable. What is of significance, however, is that this particular Bill identifies the following five policy priorities of government, namely job creation and infrastructure, which I think is very important; education and skills development; improving health care services; rural development; and justice and crime prevention.
The DA is a party for all the people. One of our core principles is to establish an open society where all people, irrespective of race, colour or gender, have equal access to opportunities. What South Africa needs at this moment, more than ever before, is a public sector that is able to solve the following priorities; and allow me to start with education.
The national Department of Education is responsible for policy development, co-ordination, monitoring, and evaluation. The provincial departments of education are responsible for the actual implementation of programmes in schools. In a submission to the Standing Committee on Appropriations, the Human Sciences Research Council, HSRC, states that current research indicates that cognitive performance at an early age of six years can predict later performance, especially in mathematics. Whether it actually happens is debatable.
Strong, quality mother-tongue development is essential for literacy, academic language, numeracy and other skills. Whether this is actually occurring too is also questionable.
It also indicates high volatility amongst the youth-learner aspirations that is failing to translate into student enrolments and high volatility amongst the youth-learner aspirations failing to translate into skilled enrolments. This was taken from what the HSRC said to us in the committee.
What this in essence means is that the current education system does not provide the adequate skills required in the labour market. It is estimated by the HSRC that before the present economic downturn, there were about 2,5 million people aged between 15 and 24 years who were out of work and not studying. It is my contention that this problem is now considerably worse.
The Standing Committee on Appropriations had a hearing on the Expanded Public Works Programme. What emerged during the hearing is that some government departments have not yet implemented clear financial control reporting; and the underspending in respect of the Expanded Public Works Programme incentive hampers the national goal of job creation. And this was crystal clear. Another question that remains is whether there is adequate communication between national, provincial and local spheres of government. All indications are that there is room for improvement, but whether the political will exists is questionable, if the lack of service delivery that exists at local level is taken into account.
The DA is of the opinion that the commitment to maintain and to create new infrastructure is essential. A thorough review of the capital expenditure and operational efficiency of state-owned enterprises is required. It is of national importance. It is not acceptable for ordinary taxpayers, who already carry a heavy tax burden, to subsidise nonprofitable state-owned enterprises. Privatisation of these entities is inevitable if we want our manufacturing sector to grow and to compete in global markets.
The cost of doing business in South Africa is still too high. The DA therefore urges government to reduce the red tape.
The DA welcomes the additional spending in this Bill on rural development. More than 40% of the total population in South Africa lives in rural areas. What is of concern, however, is that the present HSRC research indicates that only 10% of this population is economically active in organised agricultural production in these particular areas.
According to the 2010-11 Budget, spending on rural development will increase from R6 billion to R8 billion by the year 2012-13. The department also identified a number of priorities, for example, water management, agricultural support, and extension for both household and commercial farming. Rural development requires a holistic approach, and it is critical that the private sector, the Departments of Agriculture, Forestry and Fisheries; Water and Environmental Affairs; Transport; Public Works; and Co- operative Governance and Traditional Affairs, and other entities become involved in rural development.
The DA also urges the Department of Rural Development and Land Reform not to deviate from accepted international economic principles that relate to private property sales. The willing seller, willing buyer principle remains in force. We cannot afford another Zimbabwe. Our economy is vulnerable; we are not yet out of the woods. Only 12 million South Africans are employed, of which only 5,3 million actually pay income tax, whilst between 12 and 13 million people still depend upon social grants.
The portfolio committee took note of the submission by the Public Service Commission that the Department of Police does not comply with the Public Service Act that states that the suspension process should take 60 days. It took them about 80 days to suspend something like 650 of their members.
The result of this was that the department lost R5,4 million from suspensions with pay. What is further of concern is that this department has lost R102 million to financial misconduct, and only 61% of this particular total was recovered. This is clearly not acceptable. The DA urges the hon Minister of Police to institute preventative measures to rectify the financial misconduct in his department.
Violent crime and corruption threaten the economic and social future of all South Africans. Statistics released by the SAPS for April 2008 until March 2009 puts South Africa's murder rate ... [Time expired.] I thank you, Madam. [Applause.]
Madam Deputy Speaker, hon Ministers, Deputy Ministers, MPs and guests, the document on the reconstruction and development programme speaks about, among other things, the democratisation of society and people- driven needs.
The voters have spoken, through the inputs of the ANC branches that represent the aspirations and hopes of their communities, irrespective of political affiliations. The Budget speaks to the people's needs, the ANC's 2009 election manifesto and the government's priority programmes.
This paper will focus on crime prevention, policing and health, explaining why the appropriation is relevant. What is common in these two departments, SAPS and Health, is that they both have a high capacity for job creation, caring and patriotism, and are labour-intensive. The correlation between the two departments is that a person has to be physically healthy to join the police force.
In outlining the ANC's strategic approach to crime, in our 2009 strategy and tactics documents we state that:
The battle against crime cannot be separated from war and want ... specific mind sets and historical conditions drive elements of crime problems ... the network of crime has grown in their reach and sophistication across national boundaries - this includes syndicates that deal with money laundering, human smuggling as well as drug trafficking and abuse.
The government is addressing those issues. The ANC will never abandon its mass mobilisation towards crime prevention and protection of people, communities and their properties. The strong community policing forums, which emanated from our Stellenbosch conference resolutions, and again emphasised at the Polokwane conference, showed these effects, because the residents have such a lot of confidence in the policing forums.
This is because the policing forums do liaise with the communities and relevant stakeholders, and they are also able to detect anti-social behaviour in the communities and report them to relevant structures.
On top of this, we are strengthening this with our street committees, which actually act as a neighbourhood watch. They know who lives within the areas and in the neighbourhood; and as a result, they can easily detect criminal elements among themselves and report them to the police and the policing forums.
Through these structures, we can even strengthen the community courts. In rural areas and in villages we also need to mobilise the implementation of safety plans under our traditional leaders. The hon Minister of Police is also involved in meetings with the farmers, trying to resolve the issue of crime in that sector.
The National Youth Service Programme should involve youth in the massive programme of community policing safety, which includes night patrols to instil discipline among the youth as well as the value of serving and protecting the community and public property.
We thank the President for the appointment of General Bheki Cele at the helm of the Police Service. He is doing exactly what everybody in this House wants. He is changing the mindsets and promoting professionalism and discipline within the institution, which will earn the police the respect and confidence of the community. This goes further with proper training and the investigative eye of the police.
We should remember that re-enlistment of former senior police officers in this regard means those who are fit to do the work. One should not cry foul when members from the former police services are turned down, because we really need fit people, who will still be able to do the job. This is a very good programme. We wish that the fit, former police officers would come back and join us in the prevention of crime.
The implementation of a single Police Service is long overdue. We appreciate the announcement by the Minister of Police during the Budget Vote debate on 6 May 2010 on this subject. There should be co-ordination of police services for effective policing, under the control and management of the office of the general of SAPS.
There should be co-ordination of the criminal justice system, so that police investigators and prosecuting officers can ensure that some cases are not thrown out of court because of fragmented processes and technicallities. We should also strengthen the Independent Complaints Directorate to ensure compliance with the implementation of the Domestic Violence Act and that SAPS is doing as recommended.
There is also the integration of border controls, to ensure the prevention of transnational crime and the security of the country. The Department of Finance has to fill its 22 vacancies of the 97 964 posts, as at September 2009, in order to effectively fulfil this and its other core functions. The strengthening of forensic capacity is also recommended as mentioned in our 2009 election manifesto.
We know that we have the trio which will make us effective in tracing all those crimes through the assistance of forensic investigation and integrated Information and Communications Technology, ICT, utilisation. The intergovernmental co-operation under this co-ordination should also be strengthened in order to prevent and combat cyber crimes.
The number of posts in SAPS, as at 31 September 2009, according to the figures that we received yesterday, was 192 240; and the vacancy rate between 2009-10 stands at 3,5%. This translates into 6 869 posts. All these vacancies are at the lower levels of between one and six. These levels are supposed to be the levels at which poverty and unemployment are meant to be alleviated, as they are occupied by unqualified personnel and low-ranking police officials. It is really necessary and imperative that those people out there who are able to do the job effectively should be employed and those posts should be filled because they don't need any documentation.
Reference has been made to corruption, and the strategic plan of the Department of Police is indicating that the prevention, detection and investigation of corruption within the departments will be a major focus. I do not dispute the fact that the Public Service Act has shown that many of the suspended cases have gone long beyond 60 days, and this has led to fruitless expenditure in the department. Hon Minister, this really needs proper attention.
Under health, hon members, I will be talking about what the Freedom Charter says concerning health for all. It commits the government to promote the health schemes under the state, free medical care and hospitalisation, with special care for mothers and children. We are focusing on primary health care.
It should be noted that in South Africa, the first and most significant policy for health promotion appeared in the ANC's health policy document. It recognised the power of health promotion in promoting the lives of South Africans and in its vision for primary health care. It was endorsed by the White Paper and the National Health Act of 2003 as a strategic approach for ensuring an accessible, affordable and efficient health system with full community participation and intersectoral collaborations.
We have seen achievements towards that, with health facilities closer to communities. There are still areas without basic facilities, but with the human settlement programmes, at last services will be where the people are. The use of mobile clinics in remote areas should be seen as an interim measure, as it has already proved to be unreliable.
Through the establishment of clinic committees, hospital boards and public education, the communities will understand the importance of attending local health care centres and clinics instead of going to hospital for minor and chronic treatments. Instead of waiting for death to occur at any public institution and then running to the media, let us all make it our duty to address our constituencies and our political parties about the importance of attending local health centres.
This is where the Millennium Development Goals on reduction of child mortality and improvement of maternal health starts. It starts right at the clinics. Many of the deaths relating to these two goals happen due to the lack or sometimes underutilisation of resources, which include HIV/Aids and mother-to-child transmission.
The ANC-led government is actively addressing the issues of inequality in health systems, improving quality of care, public facilities and human resources. The Declaration of Alma-Ata committed members of the participating countries to health for all by 2000. One of the principles of this promotion was to emphasise primary health care. This means providing appropriate services to the people where they are and within the communities. HIV remains a threat in our country. The ANC has committed itself to working hard towards the target of cutting new HIV infections by half by 2011 and ensuring that 80% of those infected have access to ARVs. We salute President Zuma, the hon Minister of Health and others for leading by example, when they confronted all perceptions and stigmas attached to the pandemic. The ANC will continuously mobilise the people to practice safer sex.
With the involvement of faith-based organisations, we will definitely achieve what we want to by making sure that the moral fibre of the community is upheld.
The South African National Aids Council, Sanac, has been revived and is looking at the strategies that will address the fight against Aids. HIV prevention is well-resourced within the government departments, for example, the Social Services Developmental Co-ordination Programme addresses, with other departments, the HIV prevention programmes.
I can only mention the caregivers' programmes, which are under the Expanded Public Works Programme, and others focusing on HIV awareness, condom distribution and male circumcision.
The Comprehensive National Insurance Plan will address the review of hospital revitalisation, and will be looking at the maintenance of the existing facilities. Human resources development is an issue. We are hoping that the departments will come up with a human resources development programme that will address the high vacancy rates. This will include the opening of nursing colleges.
We all know that, as a profession, nursing was associated with poverty alleviation, because students used to receive salaries whilst training. This then had a positive economic impact on their families.
We have all the oversight tools to make sure that the budget is going to be used for the purposes that it is intended for. The Constitution expects all of us to call for accountability. The people out there know what they want, but depend on us to get it. Let us not fail them.
As a committee we debated so well today, which shows that all those members of other parties who attended the hearings of the Standing Committee on Appropriations understand exactly what we want.
We are inviting members from the FF Plus to attend one day. They should understand that we are here for equity and not just to promote one sector of the community. The ANC's aim is to transform the imbalances of the past. Let us all agree that everybody should get a better life. With the assistance of everyone here, we are going to achieve whatever we want - equity and equality for all members of the South African population.
With these words, we invite all those members who took part in the debate today and supported the budget to please attend the committee hearings so that they can understand what the Standing Committee on Appropriations stands for; or they should at least ask for the documents containing the terms of reference of the committee. The ANC supports the Bill. I thank you. [Applause.]
Madam Deputy Speaker, the Acting President, and colleagues. Let me also join the House in offering my condolences to the Slabbert family. I met Van Zyl Slabbert in the early 80s when I was on the other side of the political line. I can only commend his impeccable integrity and resilience. [Interjections.] No, you will learn about it soon, don't worry.
On behalf of the Minister's committee on the Budget and indeed the Cabinet, I want to thank and extend our appreciation to the Standing Committee on Appropriations and its chairperson, Mr Sogoni, and indeed all Members of Parliament who have participated through the various portfolio committees in interrogating the Appropriation Bill.
This is a new period during which a new, critical look had to be given to the Division of Revenue, to the Fiscal Framework and the proposed allocations to the various departments. Of course, all of the committees heard what the departments were delivering, but all of them also heard how each of the departments wants more money. Of course, the amounts will range from anything up to a billion rand as we have learnt. May I thank, on behalf of Cabinet, Parliament for its vigilance and very constructive debate and contributions to a very important process.
This year, Deputy Speaker, is an interesting year. It marks the first time we have implemented the Money Bills Amendment Procedure and Related Matters Act. We did so in the middle of a serious recession which, every now and then, seems to tell us it's going away, but then decides to come back.
We have had to move into a deficit of 7,3% to secure our expenditure on infrastructure, social commitment and other commitments in terms of spending programmes. We have put in place measures to mitigate the impact of this recession on workers and businesses. Also, we have conducted an internal campaign - like many governments are doing now - to encourage savings, to find value-for-money propositions and, more importantly, to get a collective voice amongst us in our fight against corruption and the virulent rent-seeking that seems to typify our society.
We must endorse Mr Sogoni's words when he says these are public funds and there is a lot more that politicians, administrative heads and others could do to make sure that we get the right value for money.
In the last three days we have had some good news. Two days ago the Reserve bank informed us that the leading indicators - these are indicators that they monitor in the economy that tell us if the curve is moving up or down, or just straight are showing that we are increasingly moving away from the recession that we've been experiencing.
Yesterday we heard from Statistics SA that our GDP for the first quarter was 4,6% and today we heard from them again that the Consumer Price Index, CPI, came out at 4,8% - much below what many people expected. [Applause.]
I think we should rightly be happy that South Africa appears to have left the recession behind; it certainly has. But when we look at the world around us, we also have to be mindful that there are still risks in the world around us. As I will illustrate to you in a moment, we are not completely in a clear. Remember that the recession that we experienced in South Africa wasn't of our own making. It was the greed and avarice of bankers in Wall Street that got us what the rest of the world had got itself into.
At the same time, we must appreciate the good news, but the key challenge before us is how to increase the volume of this good news into a roar which says we are, indeed, on the path of an inclusive growth economy. The warning for us, though, is that most of the world or many parts of the world are on what we may call a fiscal watch.
Let me give you some examples of what this fiscal watch means. The United Kingdom, UK, announced the other day - you might agree or disagree with the current coalition administration - that they are going to cut 6,25 billion in this year's budget. A sum of 1 billion is to be cut in discretionary areas like consultancy and travel costs; 95 million by cutting losts in IT spending; 1,7 billion by delaying and stopping contracts and projects; 170 million through reductions and property costs; 600 million from cutting the costs of quangos, or what we call state entities; and another 520 million by reducing other lower-value spending.
Local government must make a contribution of 1,1 billion to this overall 6 billion and over.
We would like to have those same cuts.
That is something you have to wait for, Mr Ellis, until you get to Cabinet. [Laughter.]
Now what are other countries doing? Minnesota, a state in the United States, has reduced state government aid by US$250 million, made reductions in state health and human services programmes, and has reduced state agencies and other programmes.
In Ireland a 2% pay cut has been imposed on all those earning between E15 000 and E75 000. Those earning incomes above E75 000 have to be levied at between 4% and 9% of the income as an additional levy - I'd like to know how many volunteers we have for that here in the House! There is also a health levy increase to 5% and a number of other cuts in the various services that government offers.
Greece, of course, has been in the news, but amongst the many things that they had to do as part of their fiscal consolidation is that annual holiday bonuses have been capped; pensioners' bonuses will also be capped; taxes will be increased; and deep cuts in defence spending and hospital procurement have been made. Now this story goes on in Portugal, Spain and France, and in the last 24 hours, Italy has joined the queue of those making these cuts.
Notwithstanding that record of what the rest of the world is doing, we can safely say that in South Africa we have a very clear plan, in spite of some of the comments that we have heard today, to manage our debt.
Let me repeat that the increase in our borrowing wasn't because of our own choice; it was forced upon us. We did it because we wanted to protect the programmes of government and to ensure that our people are not deprived of the services that they need or that the investment in infrastructure expenditure is not compromised in anyway.
We were not profligate like Greece or any other country and I believe that, notwithstanding our challenges, we have a very clear fiscal consolidation plan that will eventually take us from last year's 7,3% deficit, which is now 6,7%, of course, to 4,1% in three years'. And I think it will even be lower than that if we manage ourselves carefully. [Applause.]
Hon Mr MacKenzie, your question around consultants is, in fact, answered in the Estimates of National Expenditure booklet - the thick one - and I can give you page references where you can actually find it. That might help you to identify where those numbers are. Your point about the procurement processes and so on is valid, but I think it's improper to just finger one department like the Department of Correctional Services, where I know the Minister is putting in extraordinary efforts to ensure that the procurement process is put right.
The concerns that we have about debt service costs are valid. This increase from R57 billion last year to R104 billion in three years' time. And we require, if you like, a national consensus amongst all of us on the fact that we can't just borrow endlessly, neither can we spend endlessly on interest payments on our borrowings. We need to manage our fiscus in the right way, therefore, we certainly share the sentiments in that regard.
Many of our colleagues have raised questions around value for money, savings and corruption. I think we have gone some way to understanding where the gaps in the procurement system are. I don't think we have done enough, yet. There is some intensive work going on and hopefully, in the next month or two, we will be able to announce further steps to close these loopholes.
But the problem here, ladies and gentlemen, is that there is a significant culture of rent-seeking that is developing in South Africa. Make easy money; access it easily; make the right connections with politicians and bureaucrats and without putting in any sweat equity at all - I don't have to sweat, I don't have work hard, I don't have to think hard - all I need to do is make the right connection. We must end that. [Applause.]
On state-owned entities, all of us would agree that the kind of paradigm within which these entities have operated for the past five or 10 years is not quite the paradigm we want for the future. This is a matter that the President, as you know, has taken in hand and I think in the next six months or so we will begin to see some results on many of the issues that colleagues have raised.
On the savings question, let's remember that in this Budget itself the efforts that we have put in over a very short period of time gave us some R25 billion of savings which we have redistributed over the three-year period to various priorities. This is a start, but we need to do a lot more than we have done up to this point.
Colleagues, for example, the hon Lebenya-Ntanzi has raised various questions about heads of departments taking more responsibility for the funds and how they spend them. I think here we would agree with you that there is more work that leaders within the Public Service can do in order not to raise expectations of more money, but to find innovative ways to do more with less money. That is the pattern that the rest of the world is following.
How do we fund our infrastructure needs? If you listen to all the announcements that we have had recently, including Mr Ndebele's announcement that we need R75 billion to fill the potholes in our road system, then the list that we have is long. One of the things that we as a country will have to look at is how to prioritise what we want to do on the infrastructure side. Where do we get the maximum bang for our buck, if you like, and the maximum impact on the economy as a whole.
It is interesting that one of the morning newspapers today gives credit to government for its infrastructure investment and its contribution to the GDP thus far. So, read that paper and its editorial; and it's a welcome acknowledgement of the efforts and plans of government itself.
The hon Ntapane raises questions about state-owned enterprises, SOEs, and in particular the SABC and Eskom. On behalf of Minister Hogan, I can certainly give you the assurance that Eskom is on a much better footing; that its management team is really ticking and very cohesive. There are very clear plans about where they want to take the organisation in order to make sure that we have the energy suppliers that we actually need; and it is beginning to correct some of the mistakes that might have been in the system.
I can't say the same for the SABC at the moment. There is a lot of work to do in that entity and many other entities to ensure that this culture of relying on government guarantees to keep them on this side of the auditors' line is one that we need to put an end to. Management in these entities must learn to take responsibility and they must deliver the goods. That is the key.
Mr Alberts, I regret to tell you that the word "communist" is not an unfriendly word these days, because we all refer to China and China is headed by a communist party. I think many of us might want to emulate what they do to get the kind of growth figure that they have; the kind of speed at which they can implement their infrastructure projects; and the culture of can-do. The days of "swartgevaar", I'm afraid, have been left behind sometime ago and we might have to find other ways of addressing some of the questions and concerns that you have. [Applause.]
We want to agree with Mr Swart that issues - several other colleagues have mentioned this as well - of roll-overs, wasteful expenditure, over- and underexpenditure, and not quite abiding by the Public Finance and Management Act, PFMA, are all issues which the Standing Committee on Appropriations have come across. Ministers and heads of departments I'm sure will give the appropriate attention to this.
In conclusion, let me say that we have done well, this year, to implement the Money Bills Amendment procedure and Related Matters Act in Parliament; to get the right level of interaction between Ministers and the portfolio committees; and to give attention to the key issues that we have before us.
Let us recognise that we do have a very uncertain period ahead of us. There are no guarantees that the revenues will come as we think or that the economy will sustain the kind of growth indicators that it is giving us at the moment. But there are two things that we need to bear in mind.
The first is that as we go into the next budget cycle we will have to learn about what real prioritisation means; we will have to learn that we have to take money from somewhere and give it somewhere else.
And we will have to learn that we have to make trade-offs, we can't do everything for everybody at the same time from the same pot of money, and so I'm waiting for volunteers to say that I can take money from them and give it to somebody else - not necessarily on this side, though.
Finally, we all need to take collective responsibility for the fact that babies should not be dying in our hospitals; people shouldn't be living in the conditions they live in when the President visited Sweetwater; and that a lot should be done to end the theft from the state and the rent-seeking that is happening.
So let me recommend that you adopt the Appropriation Bill and I thank you for this opportunity. [Applause.]
Debate concluded.
Bill read a first time.