Deputy Chairperson, thank you for affording me this opportunity, on behalf of the Northern Cape province, to participate in the debate about such an important Bill for South Africa at large. We understand that the Division of Revenue Bill gives effect to section 214(1) of the Constitution, which requires that an Act of Parliament must provide for an equitable share and allocation of revenue.
The Division of Revenue Bill that we debate today seeks to embody a philosophy that lies at the heart of the struggle for national liberation, a struggle that has ushered in the democracy and freedom that we all enjoy today. It is a philosophy of people motivated by the desire, as Amartya Sen said, to remove "the various types of unfreedoms that leave people with little choice and little opportunity of exercising their reasoned agency" and, in turn, affirm people's freedoms, such as freedom of association, freedom of speech, freedom of expression, and freedom to explore our capabilities and abilities.
The desire to remove the various types of "unfreedoms" by our people was informed by the understanding that freedom is the primary aid of development and also the principal means of achieving it, meaning that in order to emancipate themselves from the conditions of abject poverty, the people of South Africa must firstly strive for the attainment of political freedom and, secondly, strive towards the attainment of economic freedom. We will continue to argue that the essence of our work is to create the conditions for the elimination of hunger and food insecurity, the reduction of crime, the creation of a healthy nation free of disease, and the creation of sustainable jobs, education and training for our people.
In our quest to create a better life for all, foremost on our agenda is the New Growth Path, which prioritises, inter alia, creating employment, reducing poverty and fostering economic growth in the country. It is in this context that there is a real need for government to challenge the underlying structure of growth. Over the next years, the state must do more to improve the support structures and systems for economic activities that seek to create decent work opportunities on a large scale, above all by identifying opportunities for growth and providing, where required, infrastructure, training, marketing support, adequate regulations and access to start-up capital. The call for expanding decent work opportunities includes an integrated rural development and agrarian reform strategy that addresses mass joblessness and poverty simultaneously, improving the conditions of farm workers.
However, the Northern Cape has the following concerns relating to the impact of the Division of Revenue Bill on the province. The concerns include the fact that the provincial equitable share formula does not address the challenges of distance and the rural environment. This stems from the fact that the changes to the components' weighting negatively affect the Northern Cape. The incorporation of the old Kgalagadi District Municipality and part of Pampierstad villages in the surrounding areas into the Northern Cape from the North West province did not make accommodation for transitional arrangements and, as a result, it continues to put pressure on the provincial budget allocations.
Furthermore, the adjustment of the equitable share baseline by 0,3% could compromise service delivery in this regard. In addition, decaying bulk infrastructure in municipalities in and around the Northern Cape is a continual financial constraint while we experience minimum revenue collections, as a result of poverty levels and unemployment. For example, the Sol Plaatje municipality in Kimberley recently experienced water cuts due to old infrastructure. We wish to highlight the fact that poor asset management is one factor of the decaying infrastructure, but the old bulk infrastructure is a reality and should be addressed. In his state of the nation address this year, President Zuma said:
... we are concerned that unemployment and poverty persist, despite the economic growth experienced in the past 10 years to address these concerns, we have declared 2011 a year of job creation through meaningful economic transformation and inclusive growth.
This simply translates to this: We have to mobilise all resources, especially the private sector, to contribute in terms of ensuring that retention in the current hostile economic environment becomes a reality. In fact, we strongly urge the private sector to consider retrenchment as the last, rather than the first, resort when responding to the current economic crisis. Other innovative options, such as the reduction of working hours and labour-intensive methods, should be explored with workers to save jobs.
It is important that we utilise our resources in the most efficient and effective way. Improved efficiency and effectiveness of our public spending will not only help to maintain the fiscal discipline needed during these trying times but also provide us with an opportunity to continuously review our programmes. Our focus should now not only be on how to cut unnecessary public expenditure but rather on increasing the value for money of public spending and how to make the most of limited public resources. The period ahead, therefore, calls on us to look carefully at the relationship between inputs, outputs and outcomes. Both as a province and local authorities, we must avoid unnecessary costs when executing our programmes. Let us tighten our fiscal controls and discipline, so that we not only achieve more unqualified reports from the Auditor-General, which is what we want, but simultaneously also deliver more to our people. The people of our country deserve no less.
Infrastructure development programmes can help to give access to community facilities, such as schools, hospitals, roads, water, housing and more. In this way, they will help meet the challenge of basic needs. They will also create employment, develop skills and provide small, medium and micro enterprise, SMME, development opportunities, as the policy and practice of the Expanded Public Works Programme is implemented. To emphasise, infrastructure delivery underpins the very strength of a country's competitive performance and contributes to the welfare and striving for a continuous improvement in the quality of life of our people through the provision of social support structures.
The Expanded Public Works Programme dovetails perfectly with the infrastructure spending, as it relies on lower skilled labour and, in turn, boosts growth in employment. We have no doubt that together with the private sector we will be in a position to deliver services effectively and efficiently, and we can only conquer this if we embrace the spirit of partnership. This partnership between the government, the private sector and our communities must extend to all facets of the development agenda in our province, ensuring that working together we can do more. Our primary goal remains the reconstruction and development of our economy and the progressive building of a shared future in which we can take pride in the quality of our public services, the creation of jobs for our people and security in our communities.
In conclusion, this Division of Revenue Bill deals with priorities that we determined for ourselves at national and provincial level. Our province is very rich in scarce minerals, and the type of mining activity being carried out and planned for the future makes us the richest province in the country. This cannot continue, and this process must address this anomaly. Significant progress has been made, and we are a long way from where we started, but we still have a long way to go in being able to say that our country has truly been economically transformed to benefit the poorest of the poor. Every step of this journey is driven by the absolute commitment to provide a better life for all. The Northern Cape supports the Division of Revenue Bill. I thank you. [Applause.]
Hon Chairperson, hon Minister of Finance, hon members in this House, all protocol observed, as Limpopo, we are thankful that this Bill was sent to our province by the NCOP. We find that to be in line with the Constitution, particularly section 76, as it applies to this specific Bill.
We not only submitted this Bill to the legislature and the Portfolio Committee on Treasury but took it to the people through public hearings. We see this Bill as a transmission belt between the needs of the people and delivery by government. We are proud of the ANC for ensuring that this process in the Constitution is adhered to. That is why people in Limpopo have confidence in the leadership of the ANC. [Applause.]
We find this Bill to be redistributive. When we say "redistributive" we mean to redistribute funds to those who, in the old days of apartheid, were deprived and not given the chance to express themselves. They were made passive recipients, but now they are active participants. If you look at the infrastructure, school infrastructure and urban settlement development grants, you will see that all those grants are redistributive. This is a very productive policy, which should be encouraged. Surely we should give ourselves, as government, a round of applause for embarking on a challenging process. [Applause.] The ANC will go into the corridors of history, recognised by the people for its redressive policy. We are redressing the imbalances of the past.
This Bill plays a supervisory role because it allows us and government to supervise municipalities, provinces, national Ministries, as well as premiers, including the one of the Western Cape. What better supervisor could there be?
We took the decision as a province that we were going to fight the colonial design in our province because by colonial design, South Africa - its economy in particular - was built in such a way that its neighbouring states brought labour to work as migrants.
Obviously we know that this House and Treasury will take note of the implication of our province bordering on a number of countries. We have a challenge, for example, in Musina, because when our brothers and sisters come across the border to seek education and health, we cannot chase them away because it is against the policies of the ANC to do so. The ANC encourages us to live with our neighbours and to look after their health as good hosts. We are going to remove the colonial design that was created - roots, stem and branch - through this Bill, so that we have an integrated economy here in the Southern African Development Community, SADC.
We are proud of the fact that the issue of disaster management has been addressed because in the past, in our province in particular, we suffered disasters. Hon members must understand that when disaster strikes, it does not come with drum majorettes so that we can see the drum majorettes there. It just happens like a tsunami. The funds that have been reserved will help us to deal with such unforeseen circumstances.
As a province, we are encouraging our people, consciously so, to work with Statistics SA in the upcoming census. With correct and unbiased statistics, Treasury will be able to manage its fiscals, particularly when it comes to the equitable share, having a clear understanding of population, as well as verifiable statistics. This will be the responsibility of each and every citizen. We are also encouraging our municipalities and hospitals to keep records of the services that they provide, as well as of the death and birth rates, so that we don't have inflated birth rates or deflated death rates.
What we want specifically is to ensure that there is good governance and delivery. As the province of Limpopo we are proud that, slowly but surely, Treasury is replacing organised confusion with systematic order. The organised confusion is from the past. They are introducing systematic financial order.
I can see that there are some political parties such as the DA that want the ANC to adopt a spaza-shop approach to finance. We will never do that. [Interjections.] I want to emphasise that if there is a programme on corruption, it is the ANC that is leading this campaign, through its hotlines and its structures on the ground. [Applause.] We can now see that many municipalities no longer have disclaimers.
I want to say that if you have a bus in the village and it's just lying there, it is possible for bees to come and make a hive in there. It is possible for chickens to come into the bus and lay eggs. It is also possible for dogs to sleep underneath the bus. But because the ANC bus is on the move, through this Bill, other parties are barking at the ANC. [Applause.]
We, as Limpopo, are saying that, with insight, hindsight and foresight, this Bill is the most important developmental tool. It promotes a productive economy, and on that basis our people are behind us and they gave us the mandate to support this Bill as a province. Thank you.
Deputy Chairperson, hon Minister and hon members, it is indeed a great privilege for me to reflect on the Division of Revenue Bill 2011 in this House, on behalf of the Mpumalanga Provincial Legislature, on this occasion as we debate the Bill in the year the ANC has declared the year of consolidating people's power for a national democratic society.
As we advance towards the centenary of the ANC, the Bill is an indication of the ANC's determination to improve the quality of the lives of our people. Let me draw inspiration from the words of wisdom spoken by the former President, Isithwalandwe, Dr Nelson Mandela, on the occasion of the President's Budget Vote debate in the National Assembly on 18 August 1994, when he said:
At the end of the day, the yardstick that we shall all be judged by is one and one only: and that is, are we, through our endeavours here, creating the basis to better the lives of all South Africans.
He continued and said:
This is not because the people have some subjective expectations fanned during an election campaign. Neither it is because there is a magic wand that they see in the new government.
The division of revenue by the hon Minister correctly responds to the questions asked by the former President. Indeed, our reflection on this Division of Revenue Bill is accurately captured in the reports that we submitted during the negotiation mandate. As a matter of fact and principle, we support the Bill. However, we want to raise a few issues, hon Minister, in relation to the Bill. Before we do that, we want to indicate that in terms of the division of revenue, it is our view that it indeed conforms with Chapter 3 of the Constitution, which affirms co-operative governance. To this end, this Bill puts into practice and applies financial logic to the affirmation of section 40 of our Constitution, when it says:
In the Republic, government is constituted as national, provincial and local spheres of government which are distinctive, interdependent and interrelated.
In line with our 2009 ANC manifesto priorities, we are pleased to note that the division of revenue over the next three years of expenditure will be channelled towards government's 12 outcomes, using government's functional groupings as the basis for budgeting, with the main emphasis on the following: job creation, education and skills development, health, human settlements and, more importantly - especially in our case, as Mpumalanga - rural development.
As you will know, our province is rated second in terms of HIV/Aids prevalence. That is why we welcome the increase that has been allocated to the comprehensive HIV/Aids grant. But we also want to indicate that regarding the amount allocated to health in general, as reflected by Limpopo in particular, we border on two countries - Swaziland and Mozambique. The reality of the situation is that the people of Mozambique and Swaziland, especially those close to the border of the two countries, do receive health services from the province of Mpumalanga.
We are not certain to which extent the formula, as presented, begins to take into consideration the fact that we have that challenge. Secondly, we are not sure of the extent to which the formula takes into consideration the burden of diseases. It remains one of the challenges that when the health allocation is done, this has to be taken into consideration.
In relation to education, although we are pleased with the allocation for further education and training, FET, colleges in the province, we still feel that it is insufficient when we take into consideration that Mpumalanga is one of the two provinces without a university. As a result, we are losing a lot of skills in the province, and we feel that greater and more resources should be allocated to further education and training so that we are in a position to make sure that we improve the skills that we experience a shortage in.
We want to welcome the allocation and, at long last, the recognition by national government that Mpumalanga is one of the electricity suppliers in the country. As a result, there is a lot of transportation of coal on our roads, and we are known as a province with many potholes, not necessarily because we don't have the willingness to deal with the potholes, but because of the amount of coal that is transported on our roads. Our road infrastructure is unable to deal with the amount of coal that is transported. Therefore, we welcome the amount that has been allocated to coal haulage on our road network -and we hope that it will be increased in the next financial years to come.
We are of the view that it is not a permanent solution to the problem. The permanent solution to the problem, in our view, is that we need to move towards transporting our coal via rail, so that we are in a position to move away from trucks on our roads. Then we would be in a position to maintain our roads in good condition.
One of the issues that we want to comment on, therefore, is in relation to the allocation to infrastructure, a grant that will deal with the challenges of infrastructure that is very unsafe. We also want to welcome the initiatives by National Treasury to deal with the challenges of infrastructure by making sure that a monitoring system is created so that we are in a position to make sure that, first and foremost, we accelerate service delivery in relation to infrastructure and also produce quality. It has always been a problem that where infrastructure has been built, you will find that some of it is not of good quality.
As I conclude, I also want to raise the matter that was raised in the public hearing around the issue of the municipal infrastructure grant, MIG, allocation as it relates to sports infrastructure. It is our view that the MIG funding as it relates to infrastructure has not been properly allocated because, as a result of huge competing needs in municipalities, sports infrastructure has become a casualty. It is therefore our view that some review needs to be put in place, either ring-fencing the allocation or giving it as a separate conditional grant to municipalities, if municipalities are tasked to provide that service. In doing so, we will make sure that sports infrastructure is built in our communities so that the youth also have the opportunity to use that infrastructure and move away from committing crime.
I want to conclude by saying that in the latest report that I have seen, there is no province that has received a clean audit, as alleged by the Western Cape, and therefore it is not correct that the Western Cape has obtained a clean audit. The correct information is that all departments have obtained unqualified reports - but not a clean audit. There are some departments with unqualified reports but with issues. It is wrong to come and mislead the House and say that the Western Cape has received a clean audit while it has not.
Let me conclude by saying that as reflected in our final mandate, we support the Bill, as I have indicated, and we are of the firm view that the Budget will intervene in dealing with the challenges that we are confronting as a country. Finally, let me draw on the wisdom of the late ANC president Oliver Tambo, on the occasion of his installation as the Chancellor of the University of Fort Hare on 19 October 1991, when he said:
South Africa needs to believe in our capacity to overcome our painful history; to begin again and to regard our failures ... not as finite moments, but as occasions for a new beginning.
I thank you. [Applause.]
Hon House Chairperson, I greet all members in this House. I want to remind members that - as the ANC government - we have inherited huge backlogs, especially in areas that were part of the Bantustans.
I must also remind this House that all the wrong things that happened, especially those that hurt the majority of the citizens of this country, have been happening for more than 400 years. This democratic government is only 17 years old, compared to the more than 400 years of oppression of the majority of the citizens of this country. We must always be mindful that we are only 17 and, therefore, a teenaged democratic government.
Somebody said that we must not make the mistake of beating ourselves up as teenagers because even established democracies still have problems that are the same as the ones we have in our country. You go to America or the UK and you still have the poor there. It is not only in South Africa where we have the poor.
We must also remember that the people who stay in lavish suburbs are the result of the sweat of the poor coming from the rural areas. [Applause.] Therefore, as the ANC government, we must focus on our mandate to make it possible for those who have been disadvantaged to be liberated economically.
Furthermore, it is important for us to compare ourselves with our peers, not the well-established democracies. We fully agree with and we are not even shy to acknowledge the fact that when it comes to conditional grants, we have not been performing well.
As a province, however, we have taken a conscious decision that the executive is going to take action to make sure that they do their oversight on the spending of conditional grants. We have taken a decision that we, as MECs, are not going to rely on officials' reports, but are going to do active oversight over conditional grants. That is executive activism because they have taken an interest in monitoring the budgets.
I must also indicate that we fully support and appreciate the school infrastructure backlogs grant because it's in those rural areas that schools have a backlog in infrastructure. We think that the three years - that is the time that has been allocated - will put pressure on us to make sure that we deliver as fast as possible to address those backlogs. Those children also need water, sanitation and electricity to study in better classrooms. That is also a sign that this government is concerned with the interests of the poor and not only those of the rich who have been advantaged for many decades.
I also support the committee's report to the effect that withholding funds should not be an administrative decision. It should be an executive decision so that the politicians can be the ones who take the decisions, knowing full well how they are going to make sure that the administrators do what is expected of them because we do oversight over them. This, hon Minister, through you, Chairperson, is critical. As politicians we must be part of the decision on whether or not to withhold funds.
Furthermore, remember that one of the executive decisions that must be taken, hon Minister, is the fact that we have a municipality in our province called NW397, which is a merger of Kagisano Local Municipality and Molopo Local Municipality. These two are poor municipalities and, unexpectedly, they have not received their allocation. This was an omission on the part of National Treasury in allocating the municipal systems improvement grant. They haven't allocated it. The biggest question is: If you merge two poor municipalities and don't provide a grant for their systems to be merged, how can that be possible, because they don't have income-generating capacity?
The water and sanitation survey of 2007 indicates that the population of that joint municipality is more than 82 000. Remember, we must ensure that we deliver to the people who are disadvantaged and poor. However, it will be difficult to merge the systems if you don't have a grant that will assist you. That will compromise service delivery in that area.
I must also remind this House that, in the same municipality, there are some people who were not happy that the two municipalities were merged. So, if we don't support them, then we provide fertile ground for those who want to take advantage of the good things and misuse them.
That is why I am appealing to this House and the hon Minister that an executive decision must be taken to ensure that we provide for that municipality in 2011. It can't be administrative, hon members. It can't at all. If this is not addressed, it is going to compromise us because, politically, people will feel that, since we have merged the two municipalities, there is no need to give them support.
Currently, they rely on Dr Ruth Segomotsi Mompati District Municipality and the provincial departments of finance and local government and traditional affairs for services and technical assistance. So, if you take the little that they have, how do you expect them to deliver more effectively to the people of that municipality?
Who will be the most affected people in that area? Women! Women! Women are in the majority in the rural areas and, as a woman, I can't be happy if more women are disadvantaged. Grants - the equitable share, in particular - do not provide sufficient opportunity for provinces to manoeuvre around the allocations that we get because funds are already channelled through conditional grants. We have little space to manoeuvre, especially in the rural provinces.
I must make it clear to the members of this House that sometimes when people say that they will deliver to all, we must be clear on what they mean. In the province we have the municipality of Tswaing, of which Sannieshof is part. In that municipality there is a lady called Carin Visser, who was a chairperson of the ratepayers' association. She organised people not to pay for services and she utilised that to play with people's emotions. Currently, she is a DA candidate. And you ask yourself: Was it a stepping stone to mislead people not to pay for services when they say "services for all" so that they can use it as their ticket to go and ask for votes? Is that a service for all? I must also indicate that that is a sign of a person who acts like a chameleon, who changes colour based on the conditions they find themselves in. [Interjections.] It's simply the actions of a chameleon.
Hon members of the House should remember that before Botswana became independent - when it was still Bechuanaland - this area, our capital, Mafikeng, was part of Botswana. It was the capital of Botswana then, in the early 1960s. However, when the then government took over the areas that were part of Botswana to become part of Bophuthatswana, they never made allocations for those areas. This means that we have to deal with the backlogs of the former residents of Botswana, who are currently North West or South African residents. The people are of the same families. You just cross the border and it's the same family. You go to Botswana and you find the same people who are of the same family. The question is: Why didn't they allocate at that time?
When the Minister tabled the Budget, I appreciated it. When we went out of the NA Chamber, somebody said, "Wow! What a progressive Budget, aimed at assisting the poor." It is not everybody who can say that, especially not the DA. They can't appreciate the fact that this is a progressive Budget, intended to assist those who have been disadvantaged for many years.
As I conclude, I wish to indicate that, as a province, we want to send our greetings to the current Director-General of the National Treasury for good work done. Lesetja Kganyago has done a good job, and he is going to do a good job at the Reserve Bank. [Applause.] We fully support him. It was the correct decision by the President to deploy him where he will do his best because we require his skills. The country also requires his skills and we want to wish him well. The North West supports the Division of Revenue Bill. [Applause.]
Hon members, on behalf of this House, I take this opportunity to welcome Mr Mofokeng and the other gentleman over there. [Applause.]
Madam Chair, greetings also to the Minister of Finance. The division of revenue should, in terms of the South African Constitution, seek to strengthen provinces and municipalities so that they have the ability to provide basic services and perform the functions allocated to them. It should therefore seek to promote the improvement of the living environments and livelihoods of all constituencies by means of making provision to meet their developmental and other needs. The President, in his state of the nation address, assured our people that, and I quote:
We have instituted a turnaround strategy for local government, focusing on, amongst others, strengthening of basic administrative systems, financial management and customer care.
Over the medium to long term, all of us will have to work together with municipalities to achieve the strategic outcomes of establishing a responsive, accountable, effective and efficient local government, particularly following the local government elections.
The new term of local government will have to focus on supporting and contributing to government's five priorities. Municipalities are important stakeholders in achieving the priorities of job creation, health, rural development and crime prevention.
The Minister of Finance reported on the recovery and growth in the economy of about 3,1% last year and expressed the anticipation of continued growth of about 3,6% in the current financial year.
It is appreciated that the government, through its budgets, continues in its moves to accelerate the pace of employment creation in order to focus on economic policy. It is aimed at introducing a youth employment subsidy and a jobs fund; encouraging small enterprise development; expanding investment in skills and education and improving the capacity and effectiveness of municipal development planning, including combating crime and corruption and promoting a service-orientated Public Service administration.
It is noted that the municipal infrastructure grant that the metros received was combined with a top slicing of the human settlements development grant, to provide provinces with the opportunity to create a new grant for the metros - the urban settlements development grant.
The consolidation and ring-fencing of the funding of cities are welcomed. It lays a foundation for the devolvement of housing and public transport functions to cities and the integration of other grants to form a proper fiscal instrument in support of urban, built-environment projects.
While this important policy intervention is welcomed, we hope that future policy developments concentrate on finding similar funding solutions for rural areas in our country. We hope that the next Division of Revenue Bill will address the funding and capacity issues in undercapacitated and unviable municipalities, to allow them to ensure sustainable service delivery areas, without compromising the ability of large municipalities and metros to develop economically and provide an enabling environment for job creation.
We also note that the Minister took back unspent monies from eight provinces, which we believe was the correct thing to do. I am not sure who the ninth province is, but I trust that Minister Winde will most probably be able to help me with that name.
Local government received R34,1 billion in the 2011-12 financial year. It goes up to R37,5 billion in 2012-13, and R40 billion in 2013-14 of equitable share, which is an upwards revision to the baselines. It is noted, with appreciation, that the equitable share makes provision to sustain basic service delivery and revisions towards strengthening governance and administration in smaller municipalities. Government also provided R8,6 billion in 2011-12, R9 billion in 2012-13 and R9,6 billion in 2013-14, as the metros' share of the general fuel levy. Salga understands that two municipalities will become metros following these local government elections. It has to be included in these allocations. The allocations will have to be increased as the distribution from the share of the general fuel levy will go to more municipalities. We trust that the Minister of Finance hears our plea.
Salga acknowledges the increased national transfers to local government for infrastructure which amount to R29,5 billion, R33,1 billion and R35,5 billion for each of the Medium-Term Expenditure Framework, MTEF years, including over and above municipal services infrastructure and funding for other municipal disasters. However, I need to point out that the refund on disasters is not covered by the costs that the municipalities have to bear to sort out those disasters. We hope that legislation will be addressed to make it possible to get a 100% refund.
Salga believes that the role of national and provincial government is to support and monitor provincial outcomes of municipal infrastructure investments. The efforts of these spheres of government should focus on improving the capacity, efficiency, effectiveness, sustainability and accountability of the local government sphere and on making integrated development plans the primary mechanisms for intergovernmental co- ordination.
Good municipal governance is built upon an effective interface between councillors and officials, strong links between financial and technical support functions and appropriate organisational structure, with the right people in the right positions or, in other words, fit for purpose.
It is appreciated that local government continues to give funds for capacity-building initiatives. The increase in the financial management grant to R1,4 billion of the MTEF for the modernisation of financial management and building of an in-house capacity in municipalities is noted with appreciation. However, as identified in the turnaround strategy, more attention will have to be paid to building the required technical and professional capacity of municipalities.
Salga recommended to the 2010 Budget Forum that a fiscal framework review of local government be undertaken. This review should focus on revisiting local government's share of nationally raised revenue and reforms to the equitable share formula. The conditional grants should take into consideration the ever-increasing demands for basic services, patterns of population migration and growth as well as the bulk prices of municipal services and the development responsibilities of local government.
A revised fiscal regime for local government has to consider the differentiated needs of urban and rural areas alike. The input requested the Minister of Finance to establish an independent commission to undertake the review of the local government fiscal framework in consultation with stakeholders.
While it is important to engage government on improving intergovernmental fiscal transfers, we acknowledge that municipalities need to continue to improve revenue collection and billing as well as to explore new sources of revenue in order to address service delivery challenges and promote economic growth.
In conclusion, Salga supports the 2011 Division of Revenue Bill.
Chairperson, it has been a very busy afternoon. I would like to thank the hon Minister for being present. I also want to add my voice in thanking the Director-General of the National Treasury for the excellent work he did and the expertise he brought into National Treasury. I encourage him to go and continue practising it at the Reserve Bank. We also thank the personnel in National Treasury and the provincial treasuries in South Africa for their commitment and their contributions. Some of them are sitting there.
The ANC government's objective is to create a better life for all and roll back the frontiers of poverty by focusing on its five manifesto priorities. This is demonstrated in the equitable division of revenue across all the spheres of government in order to create a national democratic society, hon Lees. Quality should inform the division of revenue - quality of spending and quality of service delivery.
As a developmental tool, the division of revenue should actively right past wrongs and correct past imbalances to improve our people's lives. We have been doing this since 1994. We could have done it before, had we been in power, but it happened in 1994. The time is now! Do you remember the posters on the lamp posts? The time is now! The priorities are the poor and the working class, and to free all people from poverty.
Hon member, is that a point of order?
Madam Chair, will the hon member take a question, please?
No. No. [Interjections.]
Hon member, do you want a question or not?
No. He can ask me outside.
No. He says no. [Interjections.]. You may continue, hon member.
Chairperson and hon Faber, we work with realities. However, hon Lees, I am a bit disappointed in you this afternoon. [Interjections.] You are very sceptical about the division of revenue. The words were "the revenue Bill is far from good". Chairperson, we must work with the financial resources that are available in this country.
Hon De Beer, can you take your seat? Yes, hon Lees? [Interjections.]
Chair, I have a great deal of respect for the hon De Beer, but I would request that his remarks be directed through the Chair and not directly to myself, please. [Interjections.]
Is that all, hon Lees?
Madam Chair, I believe that is a valid point of order, and I would request that you support me.
Thank you very much. Take your seat. Hon De Beer, continue.
I apologise if I did not address the member through you, Chairperson. However, the hon member does not come up with solutions, and I will get to that a bit later. He is sceptical about the National Youth Development Agency and about real economic growth. He will see where we come from. [Interjections.]
Given the economic structure we inherited, it must be said we cannot correct everything that was not addressed in the previous 100 years. The creation of Bantu Native Reserves had no developmental imperatives in its genesis or implementation but ensured comfort and plenty for the ruling elite. This resulted in rural and poor provinces, and our young democracy had to deal with it. That is the reality.
But it is important to see where we come from, financially. In 1994, total revenue was a mere R112,4 billion. Expenditure was R137 billion and debt service cost R24,1 billion. It is evident that in the past 17 years, the ANC-led government has succeeded in rebuilding the economy, which increased the revenue base from a mere R112,4 billion to R924 billion by the end of the Medium-Term Expenditure Framework, MTEF, period. [Applause.] Now, that is progress! Congratulations, hon Minister.
On 1 April this year, Sars collected R2 billion more in revenue. That is a fact. The point is: What do we do with that money? We must spend it wisely on resources that we have. Since 1994, 2,5 million houses have been built; 10 million people have permanent homes - 'n dak oor sy kop [a roof over his head].
A total of 14,5 million people receive social grants, of which 9,5 million are children under the age of 14, and we are going to take it up to the age of 18. But what has also happened since 1994? Then, only 36% of households had access to electricity. Today, 84% do. That is an increase. That is improvement. [Applause.] That is a reality. In 1994, 62% had access to clean water. Today, 93% do. That is improvement. In 1994, 50% had access to better sanitation. Today, the figure is 77%. That is improvement. [Interjections.] You cannot deny it. These are facts.
The division of revenue - and it is also a reality - is informed by the Minister of Finance's Medium-Term Budget Policy Statement, MTBPS, delivered in October, by the January 8 Statement of the President of the ANC and also by the state of the nation address. That forms the basis. That is the departure point.
The division of revenue contains conditional grants and agency payments to provinces and local government, and funds retained for national departments. These refer to infrastructure grant allocations to municipalities in order to meet the target priority programmes of government.
Conditional grant allocations fund the development of infrastructure and job creation. This runs like a golden thread throughout the priorities. The Financial and Fiscal Commission also recommends fiscal consolidation on successful programmes, expanding social grants and reprioritising expenditure towards maintenance and repairs.
An important development in 2011-12 is the transformation of the infrastructure grant to provinces into three sector conditional grants. This will ensure a more aligned approach to the roll-out of infrastructure delivery and reduce persistent backlogs through the health infrastructure grant, education infrastructure grant and provincial roads maintenance grant.
These grants aim to improve and revitalise hospitals, to improve education infrastructure by not allowing children to sit in mud schools, like they do in the Eastern Cape, and to improve school nutrition. We emphasise that early childhood development should be appropriately prioritised as one of the key priorities of government. Sufficient resources should be directed towards this function. The Department of Basic Education should also request such a grant. That is a proposal that we make from our side.
Conditional grants to local government aim to eradicate backlogs and build institutional capacity in local government. I am also referring to the municipal infrastructure grant, MIG, allocations, capacity-building grants and Expanded Public Works Programmes. It is clear that all infrastructure development projects are aimed at job creation and are in support of the New Growth Path.
Total employment grew by 5,6% last month - it was reported this morning. This is the highest in more than two and a half years. This is according to a report published by the staffing and outsourcing group, Adcorp Holdings. Chairperson and hon members, that is improvement. It is a reality. We all agree that the allocated funds and objectives will be reached within the division of revenue when there is decent monitoring.
We need good governance. Government, through its departments, is implementing the 10-point plan in local government. This is a turnaround strategy for both health and education, and a strategy for job creation. However, we need committed and skilled people to implement and administer these programmes and manage the spending of the taxpayer's money. The taxpayer must get value for money.
We have to change the way the Public Service works, otherwise there will be no improvement in service delivery. Looking at the report from National Treasury, dated 3 March, on the spending of conditional grants, and coming to the Western Cape - although the MEC ...
... het die vlag gewaai vanmiddag vir die Wes-Kaap ... [... waved the flag for the Western Cape this afternoon ...]
... what happened? There is underspending in education on the HIV and Aids life skills education grant. Here is the report from Treasury. [Interjections.] I am not sucking it out of my thumb. In housing, there is underspending on the human settlements development grant. That is the report of the National Treasury. [Interjections.] Underspending cannot be condoned, whatever the reason. However, there are also factors that should be taken into consideration, such as whether all alleged spending has actually been done or whether funds have been transferred to implementing agencies.
Hon members, there is a debate going on. Can we, then, be silent? Listen, even if we have to actually criticise. I do not want to call you by name, but this has been going on for some time. Continue, hon De Beer.
Chairperson, they are going to shout at me now. Again, whether the alleged spending translated into equitable and improved service delivery, and/or whether there is value for money for the money spent, should be considered.
Now, let us look at the situation in Skandaalkamp and Vissershok. Where is that? It is about 10 km from where we are sitting now. Skandaalkamp and Vissershoek are in Ward 23. More than 4 000 people are living there next to wetlands. If you are an older person and you live near water, it affects your lungs.
Jy kry brongitis en longontsteking. [One contracts bronchitis and pneumonia.]
The hon Minister is a pharmacist. They do not have water. There are only two taps for 4 000 people, and no toilets. [Interjections.] Much to the surprise of the Western Cape, we will go there and see what is going on. [Interjections.] In Ward 33, raw sewage is running down the street. [Interjections.]
Hon de Beer ...
There is a main road leading into the settlement.
Hon de Beer, conclude.
And so I can carry on. [Interjections.]
No. [Laughter.] I will give you one minute to conclude.
We have a solution. We must look at good governance at national, provincial and local level. We will have to do decent monitoring, decent evaluation - even in our committees - to do effective oversight. As members of Parliament, in your deployment, sit with your councillors once a month and take them through the issues. Take back the information that we gather here and let there be synergy between our local government members and us, as members of Parliament. I thank you. [Time expired.] [Applause.]
Deputy Chairperson, MECs and hon members of the NCOP, our municipal representatives, thank you very much for a very interesting debate. Elections make things even more interesting. [Laughter.] We suddenly find facts from all over to support whatever argument we have.
However, I think we should remember that there are no angels on earth. We all have excellent things that we do, but we all have weaknesses that we need to resolve. In that sense, I don't think there is anybody here who can say that he or she has got everything right or perfect.
Furthermore, we shouldn't bluff the public by claiming that any one political party has something going that is better than any other, except that the ruling political party can say that it is playing a major part in bringing us to 16 or 17 years of democracy. Apart from saying that it will deliver to all, it can certainly say that it has committed itself to a better life for all, something which, I think, is a huge difference. [Applause.]
It is going to take us many years of hard work to really uplift all of our people and all of our areas in accordance with all of the challenges that we actually talked about here. Nonetheless, I think it's commendable that the NCOP has connected, if you like, and taken up the challenge that the money Bills process presents to all of us. It has got more involved, got into the details and connected with provinces to hear voices from the ground and to reflect them in the way in which this debate occurred. This was the intention when we crafted the design of the NCOP many years ago.
So, congratulations to Mr Chaane and the Select Committee on Appropriations, and, indeed, to all of you from the provinces for the excellent work that you have done. We certainly appreciate the feedback that you have given about adjustments that National Treasury might need to make, or the voices that we need to listen to, in the process as we go forward.
The division of revenue process is, of course, a very important process in our fiscal governance. It is based, ultimately, on the fiscal framework, which stipulates the framework or picture within which we, as South Africans and like every family, want to live. During the division of revenue process we need to note the amount that we earn; take into cognisance that we want to spend in a way that ensures that we don't borrow too much; and ensure that we will be able to pay back what we borrow, together with the interest that we owe.
We have wonderful examples in the world at the moment, which show that if you don't follow that simple formula, you get into serious trouble. Ireland, Greece and Portugal are some of those examples. Today's Business Day talks about the possibilities of Italy finding itself in trouble. Those are countries that many hon members referred to as democracies that have been around for many years.
Yes, we can proudly say that it's now 16 years of good governance in South Africa. The ruling party has certainly given us a fiscal framework and a fiscal stability that we can all be proud of. We are second to none in the world in that regard.
It is going to be impossible to address all the concerns that all of our colleagues have raised. However, let me emphasise what hon Molusi said about removing un-freedoms and the importance of impacting on the daily lives of our people.
Hon Mabe pointed out that Bantustans were a reality in South Africa. They did leave us a particular legacy and where they existed is where most of our challenges come from in terms of delivery, the level of development, capacity and our ability to meaningfully uplift people in those areas. So, let's not deny that reality. In fact, let's share them with all South Africans so that all can share the burden of history. That is how they will recognise that this is a collective burden that we have to take on.
While we might want to point fingers at one another during election time, it doesn't really help at the end of the day. We all have to take up the challenge of asking: What does this generation of South Africans do to uplift those people and put them on a completely different footing?
Hon members have raised certain concerns about some issues which I will tackle quickly; for example, the withholding of grants. Remember that the process of withholding grants is both a political and an administrative process, and there is money that still hasn't been spent at the end of a financial year. However, it is not necessarily a punitive process. We have been trying to make this a political football and, I think, that is unfortunate.
The real intention of withholding money is to allow space for discussions and recommendations. Since provinces have spare money, if you like, in their bank account, which was supposed to have been spent in a particular way and at a particular time, all that we ask is to sit down with them and work out how they are going to spend that money. Furthermore, we ask them to allow us to support them in whatever way possible so that they can spend their money better and in a more focused way. We also ask them about the kind of technical assistance they require so that they can spend their money better.
It is also about giving provinces an opportunity to say where they want to direct these monies. We offer the provinces an opportunity to indicate whether they want to direct these monies to where they were originally intended or to new priorities that they have.
It is also an important feedback for the Infrastructure Delivery Improvement Programme, IDIP. We need to upscale this programme, put in more assistance from the Development Bank of Southern Africa, DBSA, and ensure that provinces can meet their delivery targets in a way that all of us expect them too.
The equitable share is an issue that many hon members have referred to. However, as one hon member said, that's the framework we have got to work with; that's the framework that we have got to live with. If anybody wants more money, you either have to take it from another province, or you have to take it from another sphere.
Perhaps one other thing that we need to have discussions about - even informal discussions - is whether money is really the challenge in South Africa. The more I go to different parts of the country - regardless of who governs in that part of the country - it's about how we spend the money. It's about what value we get for our money. It's about the efficiency of our systems. We must recognise that these are significant challenges that we have.
I'm assured by the staff in the Treasury and a whole lot of data that I can give you that all the concerns we have raised about Mpumalanga, or Limpopo, or Gauteng, or the Western Cape are, in fact, taken into account in each annual revision of the equitable share. We might not see it because of its technical nature. But, perhaps, that's an area that we need more technical discussions around so that we have a better understanding of what underpins this.
Of course, money is also something that we can never be satisfied with, and we must admit that. Even if we put extra into a particular area or province, we are still going to say we need more. However, it is the search for that "more" that enables us to ask how we do these things on a more efficient basis than we might have done.
Hon Chaane referred to the question of the equitable share and I hope that the reasons and approaches that I spoke of will actually help us to understand where we are coming from. Hon Lees asked questions about the effects of economic growth. Well, we have all said where we want to go. We have a growth path and we say we want to restructure the economy. I think if we become just a little more positive and less cynical about what we want to do, then we will identify with the growth path; we will identify with the necessity to create jobs.
The real issue now is not to ask where we are going but to ask: What options do I have? What answers do I have? What solutions do I have? What innovations do I have? You can again say to each of us that we dismissed your particular plan. However, the ANC is certainly very serious about creating jobs and increasing our level of growth in this country. We will do our best, and we would ask others not to play political football with this issue as well. We would like others to come to the party with concrete and better ideas. I doubt whether you can, but let's give it a shot.
You raised questions about teachers' salaries, and so on. If we go back to the last three years, billions of rand have been spent in the occupation- specific dispensation, OSD, for the improvement of teachers' salaries, and a whole lot of commitments have been made about how we will improve teacher training as well. That doesn't remove the 50-year legacy of Bantu education but it begins to address it. We are not going make Bantu education suddenly disappear from our midst - as if with some magic wand - because we have the money. And, again, don't play political football with this issue as well. These are the things that affect every young person in South Africa and their ability to cope with the challenges of the 21st century. The more we can find solutions together, the better it will be.
The MEC from the Eastern Cape, hon Masualle, also talked about the equitable share and some of the challenges of providing services in rural areas. Several other hon members raised this question as well. I think the rural areas do pose very specific and serious challenges to us. Although we have made many adjustments and policy changes as we go, I think there certainly is room for further interrogation of whether we could do better, or whether we could do things differently, or whether we could be a lot more effective than we are at this point in time.
The same applies to rural municipalities. We have got to recognise that there is a special set of challenges. I think it will be useful for provinces like the Eastern Cape, Limpopo and others to engage in a series of really deep, searching exercises, which will go beyond the normal paradigms, and ask what they must fundamentally change in order to address the lives of people in those areas.
Hon Makhubela raised certain questions about funds between spheres, and so on. Again, there is lots of information that is available to you, hon Makhubela. Please contact us afterwards because we don't really have the time to go into the details, save to say that we have R94,1 billion available for distribution at the moment. The Expanded Public Works Programme, EPWP, amount has been shifted to municipalities because we believe there is greater potential there if we can help them absorb that incentive and spend that money. We have tried at the provincial level, now let's try the municipal level and see if we could actually do better.
Hon Winde also challenged us on the equitable share and immigration into the Western Cape. As the data seems to indicate, we may have taken those factors into account. Congratulations, hon Winde, on the hospitals that you are building, but, you know, you are about 20 years too late. Nonetheless, I suppose it's better late than never as far as our people are concerned.
Hon Mahlalela has addressed the question of clean audits versus unqualified audits. We thank him very much for his assistance in that area. So, Mpumalanga is not that sleepy after all - they are on the ball! I think all provinces and provincial leadership will commit themselves to acting a lot more assertively on the question of corruption. Again, we need to get the public involved and playing an active role in this regard.
Hon Prince Zulu is worried about Nkandla. I have got to be careful because that is where our President comes from. However, we recognise that, in the allocations, Nkandla has a particular challenge in terms of the level of poverty. It is something that I believe has been taken into account. However, it becomes part of the more general challenge that we pick up as well.
Hon Van Rooyen has made some very useful contributions. However, the one that I want to respectfully challenge is when he says that the so-called one-size-fits-all approach might be unconstitutional, and so on. I can assure hon Van Rooyen that there is nothing unconstitutional. So, before somebody goes out and prints in the press that there are unconstitutional things going on, it would be useful if you checked with us about these matters because we might be able to give you the evidence that you require. At least, we don't want you to lose sleep in the Free State because of these sorts of issues. However, thank you very much for raising some of the issues. I'm sure we can address some of those questions as we go on.
We want to agree with hon Nemadzivhanani that we don't want spaza-shop finances. We have seen what it did to countries like Greece. Again, we would like to work with the provinces and ensure that the division of revenue process is truly engaged with. I'm sure that as we go into the fourth, fifth and sixth year of these processes, we will certainly take that one further.
Hon Mahlalela has particular concerns about potholes and we certainly take that into account. However, we want to agree that that will ultimately be done, sir. That is where Transnet needs to come to the party.
Sports infrastructure has a strong set of recommendations from the Select Committee on Appropriations. We will take some of those into account. Many thanks to you all, hon members, and I apologise if I haven't addressed some of the specific issues. I have got them all here, but the time is limited.
Thank you for agreeing to support the Division of Revenue Bill. This is a very important process in our democracy, where we ensure that we allocate the revenue pool in a transparent way. In fact, that is taxpayers' money, and we think of them. This is how we allocate it. This is where it is going to be spent. Yes, we are also frank with our taxpayers that we do, in fact, have many challenges. We are not going to run away from them. We have every determination to make sure that, as we go through each year, we will improve the way we explain our expenditure, the way we spend our money, and the way we undertake delivery so that they can, indeed, have a better life. [Applause.]
Debate concluded.
Question put: That the Bill be agreed to.
IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.
Bill accordingly agreed to in accordance with section 65 of the Constitution.