Hon Speaker and hon members, section 214 of our Constitution requires that government ensures a transparent and equitable system to divide nationally raised revenue between the three spheres of government. The main Budget, as we all know, announces government spending for the next financial year and preliminary allocations for the two subsequent years. In the middle of each year, the adjustments process provides an opportunity to revise the main Budget in response to changes that have affected planned government spending for that particular year.
The latest Bill passed in 2009, which is the Money Bills Amendment Procedure and Related Matters Act, requires that the Minister of Finance table a Division of Revenue Amendment Bill with the revised fiscal framework if the adjustments budget effects changes in the Division of Revenue Act, which we passed earlier in the year.
The Division of Revenue Amendment Bill tabled in this House, together with the Medium-Term Budget Policy Statement and the Adjustments Appropriation Bill on 27 October, will, for the first time, be processed in terms of the Money Bills Amendment Procedure and Related Matter Act, Act No 9 of 2009. The Division of Revenue Amendment Bill and its underlying allocations are the culmination of extensive consultation processes between national, provincial and local government.
This year's Division of Revenue Act covers, in detail, all transfers to be made to provinces and municipalities over the next three years. The schedules attached to the Division of Revenue Amendment Bill replace the schedules of the 2010 Division of Revenue Act, which we tabled earlier this year, so as to reflect the updated allocations that take account of adjustments made through the adjustments budget process, and to account for shifts, virements and corrections in the schedules of transfers tabled with the Division of Revenue earlier. The transfers for the two outer years of the Medium-Term Expenditure Framework, MTEF, are not changed and preliminary adjustments to those transfers and the transfers for 2013-14 are shown in the Medium-Term Budget Policy Statement, MTBPS.
The Division of Revenue Amendment Bill is tabled in the face of ongoing global economic uncertainty. Even with the benefit of higher than forecast government revenues, there is still a significant need for prudence, the introduction of austerity measures or the strengthening of existing austerity plans. Members are reminded that levels of government expenditure before the 2008 financial crisis have been maintained, but this was made possible through increased debt.
The adjustments budget makes provision for an additional R7,2 billion to the 2010 Budget. This consists of rollovers, unforeseeable and unavoidable expenditure, higher-than-expected personnel remuneration costs, self- financing expenditure and a saving made in the state debt costs. A R6 billion contingency reserve that was set aside and a projected saving of R3,6 billion at the national level means total expenditure decreases by R2,5 billion. National departments will therefore receive an additional R2,6 billion, provinces R6,1 billion, and municipalities R493 million.
With regard to increased allocations for a range of provincial functions, we have adjusted provincial transfers to cater for a limited number of the many spending pressures that exist in provincial budgets. These are listed hereunder. I will not bore the House with them, because they are there in the adjustments Bill.
Lastly, we also know that in the 2010 Budget the Minister of Finance announced an increase of R10,1 billion to the local government fiscal framework. This adjustment for local government covers, amongst other things, the R391 million added to the local government equitable share to allow the rollover of funds previously held back due to unspent conditional grants. An amount of R92 million was added to disaster relief grants for drought relief for the Mossel Bay Municipality. Ten million rand in rollovers was also added to the water services operating subsidy grants.
Hon Speaker, allow me to express my appreciation to the Minister for his sound leadership, the National Treasury, the entire team for the sterling work that has been put together to produce this Bill, and to the Standing Committee on Appropriations under the steady hand of hon Mshiyeni Sogoni for the contributions to the process of this Division of Revenue Amendment Bill. It is clear that the allocations contained in this year's Division of Revenue Amendment Bill should put government in a better position to deal with the additional pressures placed on the 2010 Budget that were not known when the 2010 Budget was presented. Thank you. [Applause.]
Igama lethu sonke! [It's our name!]
Hon Speaker, hon members, comrades and distinguished guests - oh, there are no guests - the Budget is a financial instrument which the majority parties the whole world over use to ensure that their policy programmes are brought into effect through the provision of the necessary financial resources. Given that the programmes of the ANC government are targeted towards the poor, service delivery and the Budget are mutually reinforcing elements of a common objective, hence amendments to the Division of Revenue Bill are critical in ensuring that the fiscus does meet the priorities that the ANC has set government in terms of delivery in the different spheres of government.
The spending priorities are budgeted for through an adjustment to already- agreed-upon programmes or where an emergency may have arisen or there is a shift in the programme or responsibilities. These priorities of the ANC government, as set out in the ANC's 2009 manifesto framework document, are also reflected in the 2010 state of the nation address. Amongst other things, these are: expanding employment and safeguarding social security; improving the quality of education and skills development; enhancing the quality of health care; rolling out a comprehensive rural strategy; creating a built environment and human settlements to support economic growth; having programmes directed towards combating crime and corruption; and prioritising local government challenges.
With respect to the political rationale for an amendment to the Division of Revenue Bill, the key question that arises in this debate is whether the amendments in the Bill address the priorities and challenges that have arisen since the tabling of the Division of Revenue Bill in February, and whether the amendments retain the overall character of the Division of Revenue Bill as being equitable.
The Deputy Minister has also referred to section 214(1) of the Constitution of South Africa, which requires that every year a Division of Revenue Act determines the equitable division of nationally raised revenue between the three spheres of government. The Intergovernmental Fiscal Relations Act prescribes the process for determining the equitable sharing and the allocation of revenue raised nationally.
The resolve to create a better life for all and eradicate poverty through focusing on the ANC's seven priority areas obviously has an impact upon the decision to amend the Division of Revenue Bill. It follows that the certainty of meeting a priority is strengthened or weakened by the quality or quantity of resource allocation towards its realisation.
We are very mindful of the fact that there are intense and healthy discussions taking place around the intergovernmental fiscal relations and the need for change. This would be obvious since it is only in practice that shortcomings are revealed and the need for change is therefore recommended.
Changes to the local equitable share formula are necessary and we need to examine the SA Local Government Association, Salga, and the Financial and Fiscal Commission, FFC, proposals in this regard.
At the September 2010 national general council of the ANC these concerns were raised and the process of addressing them at our policy conference in 2012 will happen. Concerns over formulas and related matters governing and regulating transfers are part of these ongoing healthy debates.
Whilst this amending Bill cannot address certain critical issues since that falls outside the ambit of this Bill, it is worth mentioning, however, going forward that there are critical issues for the local sphere of government that remain unresolved like the replacement of the Regional Services Council levy.
During the committee public hearings into the Medium-Term Budget Policy Statement, MTBPS, a number of issues have been raised which going forward would need to be discussed as they have a direct bearing upon the division of revenue and subsequent amendments. Many of these relate to local government and the view of the department that additional funding to the baseline would be necessary in defined areas going forward.
The SA Local Government Association, Salga, for instance, had this to say to the committee:
There should be a systematic review of baselines to ensure that the revenue allocations to local government as a whole are congruent with its full range of developmental and service delivery responsibilities and the vertical share of local government meets the increasing demand for municipal services.
The magnitude of the funding should be such that it will enable municipalities to appoint the relevant skilled personnel to manage their finances, human resources, service delivery functions, and core administration. This will address one of the key priorities of the local government turnaround strategy that municipalities are currently implementing.
Availability of credible data on key variables relating to the socioeconomic, demographic and spatial profiles of municipalities needs to be addressed not only to update the data underpinning the formula, but also a more fundamental review of the structure of the formula itself.
Hon members on my right: Please reduce the volume of the noise; let the speaker be heard.
Hon Speaker, if the hon members on the left could do the same ... [Interjections.] The HRSC ...
Mr Speaker, could we ask the person at the podium ...
Hon member, please take your seat. Allow the speaker to be heard. Is it a point of something? [Laughter.]
I'm not really sure how I would describe it, Mr Speaker. But I was just, you know ... it doesn't matter. [Laughter.]
Hon Speaker, the Human Sciences Research Council, the HSRC, which was also at the hearings, had this to say about the Medium-Term Budget Policy Statement:
Employment is clearly stated as the government's top priority; it takes into account the scale of the challenges faced in the areas of poverty, education, and health; it recognises cities as engines of growth requiring more investment in infrastructure to address bottlenecks and backlogs; it recognises that the expanding informal settlements need investment; it provides for faster growth in municipal spending than provincial and national expenditure; it recognises that investment in transport can improve living standards for workers, cut transport costs and increase productivity; and it gives due attention to rural development, youth employment, the Industrial Policy Action Plan, and the Community Works Programme.
I think that the Deputy Minister did mention the issue of the money Bills Act. Clearly, Parliament has been seized with the implications of this. A number of workshops have been held to capacitate members with the obligations of these workshops. But, clearly, I know that some members will raise the fact that there is no parliamentary budget office, but I can say without fear of contradiction that the process for the establishment of a parliamentary budget office is on as - I think that this morning - some documents were delivered to members of the committee. Finally, no committee has approached the Standing Committee on Appropriations to propose amendments after the budget review reports process. I would like to take this opportunity to thank the Minister, the Deputy Minister, National Treasury staff and colleagues of the Standing Committee on Appropriations who really dedicated their time - even after hours - to ensure that the report was passed, and today this amending Bill is being adopted. The ANC supports the passing of the Division of Revenue Amendment Bill. I thank you. [Applause.]
Deputy Speaker, the primary objective of the division of revenue to the various spheres of government should be focused on service delivery to the poor and the marginalised. Such service delivery should therefore take place at the level closest to the people and that is, in other words, local government.
National government must, however, ensure that municipalities have both the finances and the human capacity to perform proper service delivery. The millions of rands paid by national government to municipalities annually in the form of grants to augment their income are therefore welcome. The average annual growth over the Medium-Term Expenditure Framework, MTEF, in respect of conditional grants to municipalities is 11,6%.
Unfortunately, control over expenditure of the grant leaves much to be desired. Municipalities often use grants to offset overdrafts at banks or for purposes totally unrelated to the priority objectives for which the grants were made available in the first place. Worse still, is when these grants are simply not spent due to human capacity constraints at municipalities. A major cause of these capacity constraints often lies in the field of cadre deployment and the resultant appointment of employees and managers in local government who are totally unfit for purpose, but who have the right political connections.
A case in point is the devolution of property rates grants. These grants are made available by the Department of Public Works to provinces. Provinces, in turn, pay the grants over to municipalities, for municipal rates and taxes due by government for government buildings, but only after receipt by provinces of specified accounts submitted by municipalities.
As at 30 September this year, R862 million or 79% of the allocated budget for property rates devolution, had already been paid over to provinces by the Department of Public Works. The balance of the allocated budget will be paid over during October. Unfortunately, when one looks at the onward payments to municipalities thus far, a sorry tale unfolds. At the end of August 2010 an amount of R435 million had not yet been transferred or paid over to municipalities and sits in the bank accounts of provinces.
Payments effected to municipalities by KwaZulu-Natal province, for instance, amounted to 35% of monies received; the Eastern Cape 14%; the North West 9%; the Northern Cape 2%; Gauteng 1%; and Mpumalanga 0%. The Free State performed well with a 97% payout. The Western Cape payout amounted to 146% of the budget allocation and was based on proper accounts submitted by Western Cape municipalities
The reasons mainly advanced for the poor payouts to municipalities are delays in issuing of invoices by municipalities, inaccurate billing systems, inaccurate verification and reconciliation of invoices from other municipalities, the new Property Rates Act and unreasonable interest charges. All these reasons point to a serious lack of human capacity at local government level. The result is obviously a shortage of funds which hampers service delivery where it is most needed.
Provinces cannot be blamed for the poor payouts as the fault lies with local government. Despite this, provinces are requesting additional funds for the devolution of property rates. It is questionable whether any funds should be made available until such time as municipalities get their house in order.
To improve capacity, the solution lies in the appointment of the right people at local government level. Such capacity must be at the coalface. The appointment of additional Deputy Ministers will increase government expenditure tremendously, but will not improve service delivery to poverty- stricken communities one iota.
Get rid of underperforming officials and replace them with appointees appointed on merit and not based on political connections. Thank you. [Applause.]
Deputy Speaker, from Cope's side we want to state upfront that we will support the Division of Revenue Amendment Bill. However, we want to raise the following concerns.
Firstly, we agree that the Budget remains a tool for government for service delivery, but when the tool is not used appropriately to deliver service, we must raise our concerns. One of the issues that we have been dealing with is the issue of rollovers - rollovers versus service delivery. In considering this Bill, we must continue to emphasise service delivery, service delivery and, once more, service delivery in terms of the Budget that we are passing, including the Bill itself.
Our second concern is that in terms of the amending money Bill, we get given a particular period of time to consider this Bill to be able to apply our minds in order for us to be able to amend it. We are worried that the steamrolling of the process and the cutting of the time are aimed at ensuring that we do not read the fine print of the Act or the Bill itself, so that we do not see the exact amount of money that continues to bloat the top-heavy executive. We can see that this Bill will continue to put money into the executive, which is in fact going to have a negative impact on service delivery.
Thirdly, we are concerned that this Parliament will remain a rubber stamp for executive capacity. This must be addressed in order for committees to amend the Budget itself. Unless that is addressed, we will end up sounding like a broken record every time we raise this matter.
When the Budget is referred to the committee and the committee is not given appropriate capacity to consider the Budget and to make a meaningful contribution and intervention, we can say that we have the Bill but having the appropriate capacity will remain a distant dream. From our side we believe that the capacity of the committee must be put in place so that we can deal with the issue of service delivery and appropriate service delivery so that as this Parliament we pass this Act.
Having said that, the issue that has been raised, including the issue of spending capacity, remains a concern for the committee. Municipal and provincial government capacity to implement the capacity to deliver has to do with skills. Maybe when we deal with a Public Service that is integrated, we will be able to address this particular concern, but otherwise we will be supporting the Bill. Thank you. [Applause.]
Madam Deputy Speaker, the importance of this Bill lies not so much in what it says but, rather, in the fact that it is developing one of the most important powers of a democratic Parliament, namely that we are now enabled to amend the Budget and other money Bills.
After 16 years of democracy, Parliament is now exercising the important power embodied in the following statement: "There shall be no taxation before representation." We have the power to amend not only Bills which change or raise new revenues, but also those which authorise the state to spend money so raised. We should not forego this power by not using it.
One must also welcome the fact that the process of allocating revenues amongst the various spheres is based on a five-year programme. We welcome the fact that more money is given to the lower spheres of government in an overall shift of resources equal to approximately 10%, as that shows our government is placing greater emphasis on delivery. The lower the allocation of money to the people, the greater the benefit the money will have for the people.
The IFP supports the Bill because it is also good for democracy and it is good for good governance. Thank you.
Hon Deputy Speaker, hon members, comrades and guests, the ANC welcomes the introduction of this amending Bill and supports its passing by the House today. An important element of this Bill deals with allocations to local government and rural development - Mr Ellis, it is not a statement today; do not worry! - and land reform and agriculture. I will focus on these aspects of the Bill.
The ANC's approach to democratic governance is that local government is not only important for exercising individual autonomy and liberty in a functioning, democratic dispensation, but it is also a central feature of a developmental state that gives priority to the people in terms of the provision of public goods.
The central role of local government in development and service delivery is well articulated in the Constitution of the Republic. Chapter 7 section 153 states that:
A municipality must -
a) structure and manage its administration and budgeting and planning processes to give priority to the basic needs of the community, and to promote the social and economic development of the community; and
b) participate in national and provincial development programmes.
In recognition of the realities of uneven development in our country and the terrible legacy of previous apartheid spatial planning, the Constitution further promotes a redistributive approach to financing in our governance system. Chapter 13, section 227 stipulates that:
(1) Local government and each province -
a) is entitled to an equitable share of revenue raised nationally to enable it to provide basic services and perform the functions allocated to it; and
b) may receive other allocations from national government revenue, either conditionally or unconditionally.
The Bill proposes adjustments for certain areas of local government. We need to acknowledge the fact that without capacity, local government will not meet its constitutional obligations. In this regard, the municipal systems improvement grant, the purpose of which is to assist municipalities in building in-house capacity to perform their functions and stabilise institutional and governance systems, will receive R212 million this financial year. This will grow to R224 720 million in 2011-12, and up to R235 million for 2012-2013.
The local government financial management grant, the purpose of which is to promote and support reforms in financial management by building capacity in municipalities to implement the Financial Management Act, is allocated R364 589 million for 2010-11, R384 641 million for 2011-12, and R403 873 million for 2012-13.
The revised allocations and the increase in the total baseline allocations to local government have to be welcomed. This is particularly significant in the sense that additional allocations are focused on infrastructure and areas of maximum economic development potential.
Water services and infrastructure are critical for the achievement of our goals for rural development, land reform and food security. They are consistent with our development priorities as stated in the ANC election manifesto which commits government to implementing a comprehensive rural and agricultural development and land reform programme. Food security for the most vulnerable rural sectors receives a grant allocation to assist farming communities to achieve an increase in agricultural production and to enhance a sustainable conservation of natural resources through a community-based priority approach. Coupled with this, job opportunities are created through the Expanded Public Works Programme, which will generate much-needed revenue opportunities.
Ons is ook baie dankbaar vir die R50 miljoen wat vir die Wes-Kaap bewillig is om te kyk na die droogte-geteisterde gebiede. In die verlede is hierdie geld aangewend by die plekke waar die behoefte die grootste is. In 'n groot mate het die bystand van Agri Wes-Kaap 'n groot rol gespeel by insette rondom die identifisering van hierdie droogte-geteisterde gebiede. Ek wil graag die Minister versoek om op 'n gereelde basis hierdie proses to monitor sodat die werklike droogte-geteisterde gebiede nie oorgeslaan word ten gunste van politieke gewin nie. Ons moet nooit die armste van die armes op die landbou-akker vergeet nie.
Dieselfde behandeling is ook van toepassing op kommersile boere en opkomende boere wat finansiel baie swaar kry. Ek pleit dus dat die toedeling van hierdie fondse te alle tye op 'n regverdige, eerbare en wetenskaplike wyse sal plaasvind. Minister, ek laat dit in u bekwame hande. (Translation of Afrikaans paragraphs follows.)
[We are also very grateful for the R50 million which has been allocated to the Western Cape for use in drought-stricken areas. In the past, this money was utilised in places where the need was the greatest. To a large extent the contribution of Agri Western Cape played a big role with inputs around the identification of these drought-stricken areas. I would like to request the Minister to monitor this process regularly, to prevent the real drought- stricken areas from being overlooked in favour of political gain. We must never forget the poor people who are working the land.
The same treatment can also be applicable to commercial farmers and emerging farmers who are struggling financially. Therefore, I want to urge that the allocation of these funds must at all times take place in an equitable, honourable and scientific manner. Minister, I leave it in your capable hands.]
Water infrastructure in the development of agriculture forms a critical part of the government's Comprehensive Rural Development Programme. Although this programme is led by the Department of Rural Development and Land Reform, its ultimate implementation and achievement is dependent on local government and its capacity to deliver. The role of local government in building and developing an agricultural economy in our country should not be underestimated and, therefore, building water infrastructure must be given priority.
The additional allocations in this adjustment address a critical area of water infrastructure in local government and the equitable share, which is important for the development of our agricultural economy. On this basis, the ANC supports the amending Bill.
HON MEMBERS: Malibongwe! [Praise!] [Applause.]
Hon Deputy Speaker, as a consequence of the adjustments Budget, we are gathered here today to make consequential changes to the division of revenue. As I said when we debated the division of revenue in March, the division of revenue is a vital instrument that provides the first step in the process of service delivery.
It is necessary and logical that a large proportion of the revenue should be channelled towards the provinces and municipalities. These two tiers of government have constitutional service delivery mandates. What is more, they are, by virtue of proximity, supposedly better placed to deliver. We are nonetheless faced with a contrary, but incontrovertible reality that these spheres of government have a dismal track record.
It is a matter of deep concern that provinces and councils, usually those that are responsible for the poorest regions of our country, are incapable of properly spending the funds allocated to them. Some provinces, such as the Eastern Cape, are repeat offenders when it comes to the failure to spend vital funding. The political leadership of these administrations are quick to rebuff any criticism or complaint about lack of service delivery, but year in and year out they are guilty of not spending billions of rand.
Thus we look upon this Division of Revenue Bill with trepidation. We cannot disagree with it, yet we have serious reservations about the ability of this division to result in the same proportion of delivery. Conditional grants do not resolve this problem. At the heart of the matter is a severe lack of skills, coupled with an institutional culture that celebrates ineptitude and turns a blind eye to cronyism and tender fraud.
National government will simply have to improve its ability to monitor the spending of provincial and local governments. One of the leading causes of delivery failures and one the key reasons why the division of revenue does not produce the intended results is the countless vacancies at provincial and municipal levels in critical areas such as financial management and engineering.
As the UDM has indicated before, government is missing an opportunity. It could improve service delivery by providing jobs for qualified skilled professionals, whilst reducing reliance on expensive consultants. It will require political will to ensure that these positions are filled, because by their nature such positions will put the brakes on the gravy train. The UDM supports the Bill. Thank you, hon Deputy Speaker.
Deputy Speaker, section 12(4) of the money bills amendment Act requires that the Minister of Finance must table a Division of Revenue Amendment Bill with the revised fiscal framework, if the adjustments Budget effects changes to the Division of Revenue Act for the relevant year, and that is to enable us as Parliament to exercise our powers and to investigate fully those amendments.
In this case, we've seen the adjustments for 2010 which concern the Division of Revenue Act and hence this Bill. So we've seen that the revised provincial allocations include R4,2 billion being added, which includes R3,8 billion for higher salary and housing allowance costs; R350 million to cover the costs of occupation-specific dispensation agreements in health; R769 million towards the devolution of the property rate funds grant to provinces; and there are a number of other figures for provincial allocations.
What is crucial is for us as parliamentarians to fully interrogate those figures against the background of what the Minister of Finance has said. There are also additional allocations of R1,8 billion to the local government equitable share, including R92 million for drought relief in Mossel Bay, which the ACDP welcomes.
In exercising our oversight functions, we need to ensure that these additional allocations are spent on the purposes for which they've been appropriated. Of great concern to us is that, according to the Medium-Term Budget Policy Statement, capital expenditure continues to underperform in terms of the budgeted amounts, with an estimated R12,9 billion in capital underspending by provincial and local governments for the past financial year.
We as parliamentarians must ensure that both provinces and municipalities have the capacity to spend these vast sums of money allocated and that such rollovers do not happen again, particularly in view of the new powers we have in terms of the money bills amendment Act. Notwithstanding this, however, the ACDP will support this Bill. I thank you. [Applause.]
Hon Deputy Speaker, hon Ministers, hon Deputy Ministers, hon members, this Bill was tabled in Parliament on 27 October 2010 by the Minister of Finance. The Bill in essence contains a number of clauses that allow unconditional and conditional allocations to provinces and municipalities.
The Appropriations committee was fortunate to have public engagements with the National Treasury and various other public research institutions and civil society organisations. Two issues can be regarded as top priority: one, the lack of employment in rural and urban areas; two, the lack of delivery regarding sanitation, education, water, health and housing, which requires that the private and the public sectors admit that we have a delivery crisis of major proportions and provide solutions timeously.
Allow me to refer briefly to health and local government as another two pressing issues. According to the Human Sciences Research Council in their submissions to the Appropriations committee, five and a half million people in South Africa are HIV-positive, and women aged between 15 and 29 record levels of HIV of up to 33%. These figures have wide ramifications for our future growth. Of the 237 local municipalities, 26 or 11% can be classified as high- capacity municipalities. One hundred and twenty, or 51%, of all the municipalities in our country can be classified as medium-capacity municipalities, and 91 or 38% can be classified as low capacity.
The municipal infrastructure grant, MIG, expenditure will be R12,529 billion by 2011, and will grow to R18 billion by 2012-13. Studies, however, show that the quality of infrastructure being delivered is not up to standard and the maintenance of existing infrastructure leaves a lot to be desired. A survey conducted by the Department of Co-operative Governance and Traditional Affairs showed that 48% of the MIG projects experienced problems, for example contractor quality was poor, design failure was common and there were a number of other pressing issues.
What is clear is that Parliament and the Appropriations committee will have to play a greater role in future regarding the expenditure of government. Parliament approved the money bills amendment Act in April 2009. This Act provides for the formation of a budget office to assist the Finance and Appropriations committees in their deliberations about budgets. It is a deplorable state of affairs that after nearly two years the budget office has not been established despite promises by the Speaker to this effect. Madam Deputy Speaker, this is really long overdue.
The Money Bills Amendment Procedure and Related Matters Act further prescribes certain procedures and timeframes to be followed when approving the Division of Revenue Bill. For example, it prescribes that a period of nine parliamentary days should elapse after approval of the fiscal framework before the Division of Revenue Bill is approved. The purpose of this is to give the Appropriations committee the opportunity to liaise with portfolio committees and other stakeholders regarding the division of revenue. In this case, the procedure was not followed as only three days have elapsed after approval of the fiscal framework, and we are, strictly speaking, not legally compliant in approving the Division of Revenue Amendment Bill today.
Another factor to be considered is the necessity for the skills within our present municipalities to be upgraded or insourced, and this was mentioned by quite a number of other speakers. It is my considered opinion that it is a myth that we have a human capacity crisis. There are many technically competent officials in South Africa. The solution is to appoint people on merit, and not on race or other variables. This is why municipalities such as Theewaterskloof and Overstrand are well run. The DA supports the Division of Revenue Amendment Bill. I thank you. [Applause.]
Hon Deputy Speaker, Ministers and hon Members of Parliament, a government that cares about and serves its people should characterise itself by the persistent practice of not only assessing the needs of the people, but also seeking to divide its revenue in a manner that best suits such needs.
At the apex of the ANC-led government's priorities is education, along with, inter alia, health and human settlements. This prioritisation has led us to gather here today to divide the revenue, and let us do so with the full consciousness that South Africa is not a federal state but a united Republic.
We find that section 41 of the Constitution clearly states that all spheres of government and all organs of state within each sphere must preserve the peace, national unity and indivisibility of the Republic, and must secure the wellbeing of the Republic. We are one nation, hon members, despite the fact that we have nine provinces.
South Africa is a developmental state and this sets the national agenda that informs how revenue is divided among its three spheres of government. This ensures that provinces and municipalities are in collaboration so that the priorities which we have set for ourselves are met and so that our people are equitably served in a manner that reinforces their fundamental right to human dignity.
As I have already mentioned, education is our apex priority and the division of revenue should reflect that as South Africans we have resolved to build an appropriately skilled people that fits like a cog into the wheels of our economy. It pleases us that, when considering Millennium Development Goal 2, universal primary education, South Africa is likely to achieve a 95% literacy rate for the 15 to 24-year-old age group in 2015. This is a good achievement.
However, we realise that this is a quantitative figure, and having achieved that quantitative figure, we ought also to be motivated to turn the quantity into requisite quality. We at all times need to have a gendered approach to our community and our development, this notwithstanding the fact that our country has been patriarchally directed.
Millennium Development Goal 3 promotes gender equality and women empowerment. By adopting a gendered approach to education we find that our education system is intertwined with the Millennium Development Goals, MDGs. Thus, from the ANC's point of view, social transformation and the MDGs are addressed through this division of revenue.
We go further by saying that we welcome the allocation of R4,2 billion to Basic Education with the keen realisation that the bulk of it will go towards the National School Nutrition Programme. We appreciate that, because we know that no child can be taught on an empty stomach.
Through this allocation, this division of revenue also addresses MDG 1, which is concerned with the eradication of poverty. However, we wish to state that we hope that more is being allocated towards the upskilling and training of teachers so that they can improve the quality of education. This is the core business of education. We want to see it in the thorough training of children, starting from their entrance into the schooling system. This will show that admission standards are high, but will require the involvement of teachers with better qualifications.
Still, we feel that this only concentrates on two components, namely the learner component and the teacher component. We have left out the parent component of the school governing bodies, SGBs, especially those in the underdeveloped communities. This means that they have lagged behind.
We hope that, when dealing with this, the Ministries dealing with education will make sure that the parent component is empowered and educated to perform the governance part of their involvement. This will enable us to see better qualifications all round and allow us to say that we have achieved the overall intention of the MDGs.
We welcome the R3,8 billion grant allocated to FET colleges. It will act as a stimulus that will serve to increase the capacity of FET colleges and thus render them centres of first choice for school leavers as they would offer market-related skills. This will address the skills deficit.
Our other commitments, hon members, are MDG 4, which is concerned with child mortality; MDG 5, which is concerned with maternal health; and MDG 6, which is concerned with the combating of HIV and Aids, tuberculosis and other diseases. As a result, we welcome the R9,1 billion that has been set aside for Health. We remain convinced that a country that cares about the health of its people is a country bound for greater heights. Section 27 of our Constitution outlines how important health promotion is. We also believe that health is a fundamental human right and that the two cannot be separated.
Our Constitution tells us about the dignity of the people. Our people were dehumanised, denied citizenship rights and denied ownership of property in South Africa. In this regard, we welcome the R15 billion set aside to fund the creation of sustainable human settlements. We, however, want to add that we need to learn from past mistakes at the contractor and subcontractor level that tended to hobble the process of the creation of human settlements.
We applaud the Minister of Human Settlements for the action he has taken against people who really undermined the dignity of our people by building them dehumanising types of houses.
I further wish to call upon all of us to protect the poor beneficiaries who lose their houses to unscrupulous forces who take advantage of their dire economic straits and buy their properties from them for a song.
In conclusion, I would like to say that the ANC remains the only legitimate hope, leader, and liberator of our people from the legacy of inequality, deprivation, poverty, disease, and indignity. Therefore the ANC shall never fail to build and sustain a skilled, healthy society with dignified, united, nonsexist, nonracial, and prosperous people. We should all vote for the ANC.
I would like to thank the Speaker, the hon Max Sisulu, for publishing the report on the money Bills. He especially calls on the four committees to look into that report and move forward on how we address the money Bills. What is lacking? We know our powers are there. As the four committees of Finance, supported by other committees, let's work towards getting the budget office. It will really help us and it will help us to get the IFP to come and join us in our meetings so that they will know what they are doing. The ANC supports the Bill. Thank you very much. [Time expired.] [Applause.]
Thank you, Deputy Speaker. And thank you to all members for supporting this important piece of legislation. As we have indicated, this is consequential to us having made adjustments to the Adjustments Appropriation. However, several pertinent points have been raised by members.
Mr Sogoni, the chairperson, raised the matter of the review of the equitable share. Indeed, there is a process under way to reform the formula and it deals with challenges in both urban and rural areas.
Also, the issue of the baseline share is not the only challenge that municipalities face. They also face the issue of being required to improve their own revenue collection.
The issue of the funding of district municipalities also needs to be informed by the functions that they need to perform. The roles and responsibilities between the local and district municipalities remain a challenge at the moment.
Mr Swart, I agree with you that all steps must be taken to ensure that conditional grants are correctly spent. National transferring officers responsible for grants should use the mechanisms provided for in the Division of Revenue Act, including starting with the building of capacity in municipalities to spend the funds efficiently and effectively.
However, there could also be a need to delay and withhold the allocations, as we have done in the past, in order to ensure that funds are only transferred as and when that should be done. Mr Ramatlakane raised the issue of the devolution of the property rates fund grant that goes to provinces to allow them to pay municipal rates and services, which were formerly paid by the Department of Public Works. This grant will remain in place until the required level of funding is fully understood. It is not meant to deal with the inefficiencies of property rates collection by municipalities.
The issue of rollovers versus spending was raised. Rollovers are dealt with through a very rigorous process. We do not just allow for there to be rollovers. Steps are taken to ensure that monies are spent in the year allocated. Should there be a need for rollovers, they go through a process in which we actually ensure that it is only funds that have been committed and that have not been spent and that there were good reasons for those funds not being spent. It is only then that they are approved.
Mr Ntapane raised the issue of municipalities and provinces having a dismal track record. Hon member, government is committed to ensuring improved service delivery. Targets set in the outcomes will also go a long way towards dealing with the issue of improving service delivery.
The Minister, on tabling the Medium-Term Budget Policy Statement, also tabled some drastic steps that we have put in place and that we are considering in order to address corruption, even though much has been done to get clean and accountable government.
I think it would be appropriate just to thank the members for giving their support. As Mr Van der Merwe indicated, Ke batla ho tsamaya [I want to go]. [Laughter.] Thank you very much, Deputy Speaker. [Applause.]
Thank you, Deputy Minister. I can see that the hon Van der Merwe is intimidated because you have finished early.
Debate concluded.
Bill read a second time.