Chairperson, hon Minister, hon members, special delegates, and ladies and gentlemen, it is an honour for me to take part in today's debate on the Division of Revenue Bill 2011. I stand here today to present to this House the report of the select committee on the Division of Revenue Bill, as announced and tabled yesterday, 11 April, for consideration.
Chairperson, in terms of the provisions of the Money Bills Amendment Procedure and Related Matters Act, Act 9 of 2009, the Select Committee on Appropriations has the power to consider and report on spending issues, amendments to the Division of Revenue Bill, Appropriation Bill, Supplementary Estimate and Adjustments Appropriation Bill, recommendations of the Financial and Fiscal Commission, reports on actual expenditure published by National Treasury and any other related matter set out in the Money Bills Amendment Procedure and Related Matters Act.
With the co-operation and involvement of the provinces and the public, the committee has executed this mandate despite constraints arising from the late tabling of the Budget in Parliament. Subsequent to the tabling of the Bill in the National Assembly on 23 February 2011 and its transmission to the National Council of Provinces on 10 March 2011, the committee was briefed by National Treasury and the process of consultation immediately ensued. The committee received oral and written submissions and inputs from the Financial and Fiscal Commission, the SA Local Government Association, Salga, the Department of Human Settlements, the Department of Health, the Department of Energy, the Department of Public Works, the Cape Bar Council, the Department of Co-operative Governance and Traditional Affairs, the Umtshezi Local Municipality, Mr Paul Theron and Mr Philip van Ryneveld.
I submit that inputs made by these parties enriched the work of the committee and will further help in the budgeting process. Special note should be taken of the fact that some departments and persons chose to make direct submissions to the National Treasury while the parliamentary processes were still under way. I wish to commend the National Treasury for redirecting such inputs to the committee, as any consideration of these inputs without the involvement of the committee could have been seen as undermining the established parliamentary procedures dealing with legislation. For this reason, the committee presented recommendations aimed at strengthening clause 14(3) of the Bill to avoid such tendencies and to avoid possible misinterpretation of the clause in its current form in future.
Equally, the committee is concerned about the use of clause 16 of the Bill, which deals with withholding the transfer of funds in situations where there is persistent material breach of measures established in section 216 of the Constitution. The current clause, as it stands, is purely administrative as it does not permit the Minister to take any decision in a situation where such withholding will cause disruptions of basic service delivery. I submit that the 2012 Division of Revenue Bill should be strengthened to make withholding an executive function, rather than an administrative function. Perhaps clause 23 of the 2001 Division of Revenue Bill can best address our concerns on this matter and I call on the Minister to consider it.
The 2011 Division of Revenue Bill provides for the phasing out of certain conditional grants - those that are believed to have met the objectives they were intended for - and further introduces new grants. These grants are introduced in order to align planning and implementation with sector needs and to reduce persistent backlogs in the eradication of inappropriate school infrastructure and the provision of water, sanitation and electricity at schools, as well as the improvement of informal settlements. We support all these measures and will continue to conduct oversight to ensure that the implementation thereof is realised.
While we support the views of the provinces on the need to continue discussions on the equitable share formula, we equally remain concerned about poor spending patterns by most provinces, particularly on conditional grants. It is a reality that most provinces still experience structural problems created by the apartheid regime of Bantustans, with, of course, the exclusion of Gauteng and Western Cape. These provinces were left with structural defects, crippled by huge backlogs, poverty, underdevelopment and without enough resources and capacity. In the spirit of intergovernmental relations, we plead with all departments to assist in bridging these challenges. If these challenges are not urgently and drastically addressed, the problem of under-spending and/or overspending will persist.
While the Western Cape continues to be cited as a shining example of clean governance, improved services and clean audit results, ignoring the fact that its problems and challenges are different from those of other provinces would be a huge mistake. The Western Cape had it nice even during the apartheid period. We should not lose sight of the reality that even the much-talked-about quality services provided in this province are delivered only to the very same people who were previously advantaged.
Not true!
Such services seem to be exclusive to the extent that migration of the previously disadvantaged to this province to have access to and share these services is met with much resistance and lamentation, as if the same was not the case in Gauteng and the other provinces bordering Lesotho, Zimbabwe, Mozambique, Namibia and Botswana.
As we encourage other provinces to follow this shining example, it also becomes relevant to caution that improved services should mainly cater for those who never enjoyed such services before, that is, the disadvantaged. One cannot help but speak up against the appalling conditions that the poor in Philippi, Khayelitsha, Worcester, Oudtshoorn, Knysna and many informal settlements in and around Cape Town live in. We emphasise the fact that government resources are meant to improve the lives of the people as a whole and should not be spent in a manner and style reminiscent of the past. We should condemn the emerging tendencies displayed by parties like the DA of creating safe and developed havens benefiting minorities at the expense of the poor.
Clean governance and improved services do not mean the introduction of apartheid segregation policies through the back door. It does not mean the deepening of poverty and inequality levels, as seems to be the case here in the Mother City. It does not mean that a metropolitan centre like Cape Town is a province on its own, to the exclusion of other municipalities not controlled by the DA.
Give us a chance and we'll show you!
It does not mean the maintenance of the status quo and acceleration of inequalities. Clean governance and improved services have everything to do with ensuring that government funds are used appropriately to benefit all citizens, irrespective of their colour. It means improving the lives of the poor and the previously disadvantaged. It means bringing clean water to those who, because of the dark complexion of their skins, were forced to drink from the same well as animals. It means making sure that those who were forced to help themselves in buckets and on fields get decent, water-borne toilets. It means that those who grew up playing in dusty roads get appropriate recreational and sporting facilities. It means that those whose cars were driven on roads full of dust and potholes get tarred roads like those in the so-called urban areas. It means that those whose movements were restricted and who could not make choices regarding where they wanted to live and work get such freedoms. It means that those who, for years, were forced to learn under trees will get proper schools. It means not knowing the stars and candles as the only source of light at night. We all need electricity; it is our right. It means an improved public transport system. It means talking more about Soweto as one of the good models and examples of how townships should be developed and how townships should be improved. It means talking more about our improved public health institutions, not private hospitals meant for and serving largely the rich.
We want to see more resources being released to develop areas like Nyanga, Khayelitsha, Gugulethu and Philippi. We want to see these areas being improved and developed like Soweto before celebrating improved services when such benefit old beneficiaries. A slogan like "Re direla botlhe", [we work for all] with nothing to back it up in practice, is being cruel to the truth.
Chairperson, I am satisfied that the committee has discharged its duties as expected and is satisfied with how the national revenue funds have been allocated. I therefore table the report for adoption by this House. [Applause.]
Chairperson, the solution to job creation lies not in the ANC's Expanded Public Works Programme, EPWP, and its bloated, inefficient and frequently corrupt civil service and, certainly, does not lie in the R1,2 billion to be handed to the National Youth Development Agency, NYDA. The National Development Youth Agency is perceived by many as little more than the ANC Youth League in disguise. This organisation will no doubt stick to form and waste this huge amount of money on who knows what weird and debauched projects or perhaps parties they may dream up to amuse themselves.
What is required is real economic growth. Economic growth is only achievable when all South Africans are given the opportunity to achieve their full potential. And it is interesting to hear hon Chaane talking about the Western Cape. The Western Cape was run by the ANC, which failed to provide the service the DA is now providing and improvements have been made since the ANC was removed from governance. We need a society which ensures that every South African is given the opportunity to fulfil their potential and their dreams. We need an open opportunity society for all the people, not just some.
The most important and vital role of any government wishing to give every South African the opportunity to achieve their potential and to pull their families out of poverty must surely be to provide education that is globally competitive to all our children. This, more than anything else, means providing highly qualified and motivated teachers in all our schools, no matter whether they are situated in Cape Town or in the foothills of the Drakensberg of KwaZulu-Natal.
It is simply outrageous to give the NYDA R1,2 billion when our teachers remain so poorly paid. The amount of R8,2 billion appropriated for the school infrastructure backlog grant over the Medium-Term Expenditure Framework, MTEF, period is of little use if it is to be spent on building schools in deep rural areas that remain undesirable teaching posts for most of our poorly paid teachers. Why is it that 16 years after the end of apartheid and its evil policy of separate development, the ANC continues to perpetuate the Bantustan concept by providing poor education to rural children, dooming them to a life of rural poverty with no hope of achieving their full potential?
Hon Chairperson, where is the appropriation ...
Hon Lees, can you hold on?
Deputy Chairperson, I'm rising on a point of order: I wonder if it's parliamentary for a member to address this House with his hands in his pockets. [Laughter.]
Hon members, order! Hon Lees, you heard what the gentleman said.
What is your ruling, Madam Chair?
Would you please just continue with the debate, but make sure that your hands are out of your pockets. [Laughter.]
With pleasure, Madam Chair.
On a point of order, Madam: It may be that the member has lots of money and is holding it. He must share it because we are debating money issues now and he has lots of money. Thanks, Madam.
Please comply and continue with the debate.
Chair, that was not a point of order. I can assure the hon member Bloem that I have no money in my pocket but it's a pleasure to have my hand in my pocket. [Laughter.]
Hon Chair, where is the appropriation to bring teachers' salaries to a level commensurate with their qualifications and responsibilities? Where is the appropriation of enough funds for training to bring the qualifications of teachers up to global levels?
In 2010, Kwa-Zulu Natal, my province, employed 8 317 teachers who had nothing more than a Grade 12 qualification. In fact, 20 teachers did not even have a Grade 12 and, in reply to a written question, the Minister of Basic Education stated they were not qualified to teach any grade from Grade 1 to Grade 12. One has to ask why these persons were employed as teachers at all. These are the teachers who are given the responsibility to provide, through education, the opportunity for all our children to achieve their full potential. This is certainly not fair on the teachers concerned, but is surely criminally negligent on the part of the ANC government.
It is an exercise in futility to embark on a strategy of filling vacant posts, as simplistically stated by President Zuma. Instead of giving more ANC cadres unproductive and frequently corrupt employment in the unproductive Public Service - or should I say disservice - these funds should be directed at the crisis of the shockingly low standards of education being offered to our children.
The 2011 Division of Revenue Bill looks good from afar, but in reality it is far from good. Thank you. [Applause.]
Hon members, please adhere to the policy of no movement, in and out, while the debate is on. Thank you.
Deputy Chair, in terms of the policy that you have just pronounced on, is it parliamentary for an hon member to work on his computer during the sitting?
Chairperson, all we need to do is to behave like hon members and stop playing. The chair referred to hon Mokgoro, who crossed between the member and the Chair, which has nothing to do with what has been raised now.
Deputy Chair and hon members, we also welcome the opportunity to respond to the report from the committee. We welcome the report.
As the Eastern Cape, we note and appreciate the committee's recommendations, particularly on some aspects that still need further debate. Of course we welcome the point made that there are matters that need to be attended to. If these matters were attended to, they would make the committee have another view of some of the proposals that are on the table. In this regard I would like to speak about the issue of spending on resources that are made available to provinces, particularly conditional grants in the Eastern Cape.
We have, for a considerable time, been confronted with challenges that really do not bode well in terms of our spending. We have taken measures to correct the situation. There are improvements that we can already see but, going forward, we have made a commitment that we will have zero tolerance of underspending. We take quarterly reviews on performance from accounting officers, including MECs in their collective as the executive committee so that we can correct the situation.
I am making this point because in our province, according to available data, we currently have in excess of 4,8 million people living below the poverty line who require very catalytic and focused public and private investment in order to improve their lot. For them the equal opportunities the speaker who spoke before me referred to are a distant dream that they are not likely to have, given the conditions they were left in by the system that was preponderant in this country for a number of years. I talk here of people who need quality roads in order to access just economic opportunities. I talk here of people who need decent schooling in the form of facilities that have not been readily available for a number of years.
We welcome most of the interventions that this Division of Revenue Bill is speaking to. I speak here particularly on the grant to attend to infrastructure backlogs as this relates to education.
We also want to say that to ensure that we have sustainable communities we will be focusing extensively on the improvement of some of our small towns because, without economic livelihoods in these towns, there will not be any opportunities for people to prosper so that we can deal decisively with issues of poverty and joblessness. It will only be when such economic opportunities are created that the situation can be changed.
Working together with national departments and public entities, we are looking at massifying their collective ability so that we can bring about change in the situation. We do think that, on an ongoing basis, we may need to look continuously at the equitable share funding formula because there are quite a number of variables that change from time to time.
In fact, another variable that we would like to place firmly on the agenda when that time arises has to do with the cost of providing services, particularly for people in the far-flung areas. The cost of providing, for example, a house in the city of Cape Town is one thing. If one talks about the rural community of Madwaleni, the cost of providing a house to a beneficiary there is incomparable to that of providing a house to a beneficiary in the city of Cape Town. Yes, there may be people changing their places of abode. But in terms of the cost of providing services, these are things we need to look into.
Of course we have been working with the National Treasury. We have undertaken that we want to have a much closer collaborative effort with them to ensure, on a continuous basis, that they are brought in to assist wherever that is needed.
This honourable House has in the recent past been presented with an intervention that was proposed by the Department of Education and which we welcome very much. We hope that this House will continue to play its oversight role. We would like to make that effective and efficient at the earliest possible time, so that the process does not take much longer. We would like to work with the national Minister, who is here. We have to have all hands on deck to ensure that the matter is addressed.
On behalf of the province, we support this report and welcome the framework. Thank you. [Applause.]
Chairperson, hon members and hon Minister of Finance, Mr Pravin Gordhan, the MTEF provides for a total of R808,3 billion to be allocated in the 2011-12 financial year, R865,9 billion in the 2012-13 financial year and R925,6 billion in the 2013-14 financial year. We have a contingency reserve of R38,9 billion. Moreover, provision has been made for debt service costs that will amount to R77 billion for 2012, rising to R104 billion. Can the Minister clarify for us what it is that he means by this? What is this increment for debt service costs?
The aggregate expenditure over the next three years excludes R94,1 billion in additional noninterest allocations over the baseline projections on the 2010 Budget. Of these additional allocations, R48,8 billion goes to the national government, R40,2 billion goes to provinces and R5,1 billion goes to local government.
With regard to conditional grants, we see here that provinces received R69,4 billion, including indirect transfers of R700 billion for the schools infrastructure backlog grant.
We, as Cope, appreciate the changes effected on the Bill. But are we sure that we have qualified members on the ground to utilise the budget that has been allocated? If the Minister can agree that we have suitable people to utilise the budget, then what will be his reaction to the statement made in Die Burger on 8 April 2011 which says ...
Ek haal aan:
Minister Pravin Gordhan, die Minister van Finansies, het Maandag in die Staatskoerant aangekondig dat R2,4 miljard van agt provinsies weggeneem word weens onderbesteding.
Ek verstaan dat die R2,4 miljard teruggehou word totdat die projekte die oorbetaling na die provinsies regverdig. Minister, my vraag is: Is dit hoe dienslewering bevorder word? (Translation of Afrikaans paragraph follows.)
[I quote:
Minister Pravin Gordhan, die Minister van Finansies, het Maandag in die Staatskoerant aangekondig dat R2,4 miljard van agt provinsies weggeneem word weens onderbesteding.
I gather that the R2,4 billion is being held back until the projects justify the transfer of funds to the provinces. Minister, my question is: Is this how service delivery is promoted?]
We also welcome government's decision to directly target the infrastructure backlog and set timeframes for the process. This was in line with the recommendations made by the Financial and Fiscal Commission, FFC, in 2002. We also align ourselves with the FFC recommendations of cautioning the government against the diversion of resources away from priorities which may not lead to a better output. Therefore, R267,2 million has been allocated to the Expanded Public Works Programme, EPWP, incentive grant for provinces to increase job creation. But at the same time, this amount has been decreased by R63,8 million from R331 million in the 2010-11 financial year. Can the Minister tell us what the vision of this reduction is? [Interjections.] [Time expired.]
Presiding officer and hon members, I just want to indicate that our MEC for finance would also have been here, but he is addressing a finance indaba in our province. He is fully aware of everything that is happening here and concurs. Basically, we want to indicate that there are a number of challenges that we have noted. One of them is in relation to conditional grants, but there is a particular approach that we want to adopt in this area.
We also wish to indicate that, over the years, the provincial equitable share has been revised and reviewed. It has evolved from seven components to five components currently and these are health, education and basic education, economic activity, poverty and institutional components. However, notable challenges were experienced during the rearrangement of provincial boundaries in 2006. One of the biggest concerns was that the equitable share formula was not flexible enough to deal with expenditure responsibilities that were driving provincial budgets.
At the provincial level, some of the challenges that have been identified with regard to the provincial equitable share were the following: Provinces were expected to achieve more with the equitable share because they were expected to perform more functions; the equitable share formula did not recognise the fiscal capacity of the provinces, though this is assumed through the economic output component; the equitable share was misaligned with the functions that are performed by the provinces; the formula did not capture changes to the total costs, especially fixed costs in service provision associated with migration; the current formula did not differentiate the expenditure needs across the provinces and there was a disjuncture in the way the other spheres were resourced vis--vis the expenditure requirements by these spheres of government.
In order to increase the revenue base, we are of the firm view that the economy has to grow even bigger. Over the years, in dealing with the challenges that are facing the provincial spheres of government, efforts have been made in tweaking the provincial equitable share. However, this has not provided the desired outcome. Moreover, it has just shifted resources between provinces without addressing the funding challenges at the provincial level. In terms of the Medium-Term Expenditure Framework, MTEF, the provincial share of the total budget remains at around 43,8% while the national average share is increasing from 47% to 47,3% at the end of the MTEF.
The focus area in dealing with the funding issues is around the vertical split between the spheres of government. This is a political debate but it will have to be carefully discussed to arrive at the most suitable way of sharing the resources for effective service delivery throughout the country. The role of provinces in economic development should be clarified, especially in relation to municipalities, and resources should also accompany this particular function.
Conditional grants are funds assigned to provinces from national government for the achievement of specific national objectives over and above those considered as basic. Conditional grants have been motivated by the need to ensure minimum nationwide standards for the provision of services of national concern. They are specifically used to provide for national priorities in provincial and local governments' budgets, promote national norms and standards, compensate provinces for cross-boundary flows, effect transition by supporting capacity-building and organisational reforms and address backlogs and regional disparities in social infrastructure.
Despite the good intent of conditional grants, their proliferation has posed a serious challenge on the powers of provinces. The Financial and Fiscal Commission, FFC, undertook a review of conditional grants and their findings included the following: Grants in general are allocated by national government, with little or no consultation at all with the other spheres of government. However, most importantly, grant allocations tend to be linked to key milestones that do not take provincial dynamics into account. Grants also pose a reporting burden to provinces, which is very cumbersome. Over the years there has been a phasing out of conditional grants and recently there seems to have been an attempt to introduce more conditional grants to provinces. This is likely to be interpreted as taking away some of the constitutional powers of provinces.
These are some of the issues we wanted to raise. Obviously, we have actually had a response to what we have always argued: that the economic development component of provinces should be discussed. The response has been that the powers and functions are those of municipalities. That is why we want a proper discussion across the spheres so that there is an understanding and resources can be allocated in line with that discussion.
Therefore, we are convinced that this year's division will take care of a number of issues, even if in our input we have raised the issue that the funds for human settlements should be increased due to immigration into our provinces. We are, nevertheless, fully behind this Bill and also fully in support. In our province we were unanimous in our support for all the issues we have raised. Thank you. [Applause.]
Deputy Chairperson, it's an honour for me to be in this House today. First of all, I recognise the Minister and all the hon members.
At the outset I want to say that the Western Cape supports this Division of Revenue Bill. There are a couple of highlighted areas that I would like to cover in the time allocated to me. I must just say at the outset that of course we welcome the R36 billion that we are going to spend this year in the province, or the R100 billion over the Medium-Term Expenditure Framework, MTEF, cycle, of which 95% comes to our province via this division of revenue.
The areas that I want to highlight follow on something the chair said when he started this debate, as well as my colleague from Gauteng. It is something that really affects Gauteng, the Western Cape and KwaZulu-Natal, namely the in-migration of people coming to look for opportunities in our province: opportunities for jobs, opportunities around health care and opportunities around education.
I must point out that we welcome citizens from other provinces who wish come to the Western Cape in order to receive better quality health care and education. We welcome them with open arms, because we believe that we need to make sure that we offer all South Africans the service they deserve. Obviously, this puts major pressure on our allocation, specifically when head-per-head rand allocation is happening in other provinces but we are expected to deliver that service. Obviously we are going to have a corrective measure happening in this country shortly with the new census, which will help us correct some of those numbers. I think the migration and the trends are happening ahead of that curve and obviously that does put pressure on how we are able to deliver effective services.
I also want to concur with the Minister when he stated in his Budget Speech that the above-inflation - rate salaries that are negotiated really put huge, huge pressure on us as provinces, because every single time a salary negotiation happens above budget and we do not get the full compensation for that above-average negotiation, those extra funds have to come out of our service delivery pockets. That really makes a big difference. In our province, with 76 000 staff members, just on R20 billion of our R36 billion goes to salaries and wages. So, one can understand that with such a big proportion of our budget going into that sector, it does make a difference if you miss it by one or two per cent.
I would also like to say, specifically around the provincial equitable share review, that I really welcome that review. I also specifically welcome the increase for education and health. Although it's not very significant, there is an increase from 9,23% to 9,37% over the 2011 MTEF. Obviously, there is an increase and we do welcome it. We do think we should see some of those numbers rising after the census.
The Western Cape received an increase of 5,37% in the conditional grants and I think perhaps that could also be increased a little bit. We are moving from R8,156 billion in 2011-12 conditional grants to R8,747 billion in 2012-13 and R9,580 billion in 2013-14.
I want to talk about infrastructure spending. Contrary to the Chair's opening gambit in this debate, stating that all the money in this province is spent on rich communities - I think that's what he said - quite frankly, when it comes to infrastructure spending, we are busy building two hospitals at the moment. If you're not aware of where they are, they are in Mitchells Plain and Khayelitsha - very wealthy suburbs of our city! [Applause.]
What we are also doing is that we are building ... [Interjections.]
Hon member, could you please sit down?
Would the member, in his speech, also include that those were the ANC's plans?
Thank you, Deputy Chair... [Interjections.]
Hon members ...
Deputy Chair, on a point of order: That was not a point of order. You have never allowed the Chief Whip to say something. Now she is putting her comments to the speaker. You must rule on that. That was not a point of order.
Hon Bloem, are you raising a point of order? [Interjections.] May I honestly ask you, then, not to tell me what to do? Take your seat. Thank you very much.
Thank you very much, Deputy Chairperson. In this province during this financial year, we are also building 10 new schools and refurbishing 15 more, with a further 15 going into the planning stage. We are also going to be able to produce or deliver more schools and more health care facilities because we are making specific use of the downturn in the economy and we are finding, through the tender processes, that we are getting far better bang for our buck and are able to build schools cheaper than we have been able to for a very long time. That is in line with what the Minister said last year and this year - that we have to learn to do more with less. That is exactly what we've got to do. We've got to make sure that we are more efficient when we spend the taxpayer's money.
Talking about spending the taxpayer's money, obviously I must use this opportunity to show that we are doing it effectively. I can tell this House that it was a great feeling in our province when we received clean audits across the board from the Auditor-General. Obviously we've got to work as hard as we can to continue that record. It's not always as easily done as said, but we will make sure that we carry the responsibility of spending the taxpayer's money efficiently.
I also want to touch on an area of governance. I think you might have noted that we passed a piece of legislation in our province that says we will not be allowing officials working in our province to do business with the province. The Auditor-General highlighted how many people work in the departments and actually do work with those departments. We passed a law and we are going to be rolling it out this year. We can analyse our list of officials who work for us and our supply chain system to see if there are any duplications. This is where we can root out corruption.
Talking about declarations, I think there are a number of issues we need to highlight. The Public Service Commission says that it's a legal requirement for each of us as hon members to complete our declaration of our own interests every year. This also applies to senior management across government. Only 42% of senior managers in South Africa actually filled in that declaration. There is a law that states it has to be done, but only 42% have done it. In the Western Cape, 100% have filled in their forms of declaration. I think that just really goes to show that we've got to continue to improve, continue that cycle and continue to offer taxpayers the guarantee that we are going to look after their money responsibly.
I must also say that I think we really, really need to come down on corruption. We all talk about corruption time and time again. We really need to put measures in place to deal with corruption, to root it out where it raises its head and make sure that we deal with it in a public manner. That is the only way we are going to get rid of this scourge.
Also, I would like to speak to this House following on the chair of the committee's comments when he opened this debate. He said a lot about the City of Cape Town. I would like to offer the Universal Household Access to Basic Services, uHABS, Index, report, which talks exactly about service delivery on the ground to the people who need it. He spoke about our money being spent on the rich and not the poor. Well, that report speaks exactly to service delivery. I would like him to read some of the report of the national Minister of local government and some of the annual report, which shows where that money is spent.
You will have noticed that the opposition in the Western Cape does not raise that knee-jerk comment to our budget anymore. They no longer say, "Ah, it's only being spent on the rich!" We showed them that 83% of the budget of the Western Cape goes directly to benefit the poor. That's 83% of that budget! [Applause.]
I would also like to say that we need to make sure that the way in which we spend our money is in the interests of delivering a different life to everybody in this country. How do we spend that money? I know that from our provincial government's point of view we've got to make sure that in our own procurement space we are spending our money effectively and specifically to help the small, medium and micro enterprise, SMME, sector to make a difference. We are helping the SMME sector to be more cost- effective and I'm very happy to report in this House that the last quarterly report ...
Hon member, you have only one minute left. Can you conclude?
Thank you, Chair. The report shows that in our procurement expenditure for the last quarter, 85% of the total procurement of this province went to black-owned enterprises - 85% of our expenditure! [Applause.] It is through those mechanisms that we can really make a difference in helping the SMME sector to grow and so play our part in the challenge to create those five million jobs, which the President has put to all of us. [Applause.]
UMntwana M M M ZULU: Sihlalo, uNgqongqoshe woMnyango weziMali kuleli lizwe lakithi eNingizimu Afrika, abahlonishwa bonke abakhona, mhlonishwa Ngqongqoshe kuMthethosivivinywa woKwabiwa kweZimali zeZwe [Division of Revenue Bill] yisikhathi lapho okwazi khona ukuthi wabele yonke imikhakha kahulumeni - njengoba sinemikhakha emithathu kahulumeni kuleli lizwe lakithi - izimali ngendlela elinganayo.
Kukhona okuye kungiphazamise njengendoda yakwaZulu. Uma ngabe uthi uhulumeni kazwelonke uwunikeza ama-47,3%, uhulumeni wezifundazwe uwunika ama-44,0% bese kuthi komasipala lapho kukhona khona abantu ngempela bese uthi ubanikeza ama-8,7%. Kuyangikhalisa ukuthi mhlawumbe siyolokhu siba neshwa lokuthi ezweni lakithi kuhlale kunezibhelu esingeke sikwazi ukuziqonda kahle.
Uma ngiqala ngicabanga ngokuthi kukhona engifisa kuthuthukiswe kuye kufike engqondweni yami umasipala oseduze nami. Kulukhuni ukuthi ngigijime ngiye kuhulumeni wesifundazwe ngithi kukhona okushodayo, uye ubuke lokhu okuseduzane nawe. Mhlonishwa Ngqongqoshe, ngomunye unyaka wezimali kuyofanele ukubhekelele ukuthi omasipala njengoba bengama-233 ezweni kufanele babelwe kanjani izimali. Mhlawumbe kungancishwa thina ezingeni likazwelonke kunoma kuncishwe laba abantu abasemakhaya kulolu daba lokwabiwa kwezimali.
Ngiyazi ukuthi akuwona umsebenzi wakho ukuthi ukhiphe le mali bese uyayelusa ukuthi isetshenziswa kanjani. Kuyofanele ukuthi phela lo Mnyango WamaPhoyisa egameni likahulumeni wokubambisana - phela sesifile ngamasela kuyo yonke imikhakha kahulumeni - ubheke ukuthi lezi zimali ziyakwazi yini ukusiza abantu bakithi ngendlela okuyiyonayona.
Okunye okungikhathazayo kakhulu emoyeni wami ukuthi ingabe leliya phupho elihle kangaka elalishiwo ngumhlonishwa uMongameli lokuthi kufanele kwakhiwe izindawo zomsebenzi, lingafezeka yini uma kusekhona imali eyizigidigidi ezingu-2,47 obuye uyilande ezifundazweni ibuyele kuwe ezingeni likazwelonke ngoba kuthiwa kusuke kungahlelwanga kahle. Ngiyacela- ke ukuthi uma senihlangene ngaphansi kwephupho likahulumeni wokubambisana nikwazi ukuhlela kahle ukuthi lezi zimali zisetshenziswe ngendlela efanele, lapho bonke abantu bayahlomula kuzo kunokuba zilandwe futhi ziphinde ziyobekwa ethala noma zibuye zihlahlelwe noma zabiwe kabusha futhi.
Ngiyazi ukuthi kulukhuni kangakanani ukubhekana nezinkinga esibhekene nazo kuleli lizwe kodwa ngiyethemba ukuthi kulo nyaka wezimali mhlawumbe kukhona lapho esizokufeza emva kweminyaka eyi-17, kubonakale ukuthi abantu bakithi bayakwazi ukuphucuzeka.
Abantu bakithi emakhaya bayakhala ngoba kuncane kakhulu okuya kubona. Uma ngingakutshela nje ngomasipala oseduze kwami okuthiwa iNkandla, imali okufuneka ukuthi ukwazi uyisebenzisa ukubhekana nezidingo zabantu baseNkandla abangaphezulu kwezinkulungwane ezingama-255, iyizigidi ezingama- 39. Iyonanto eye ingikhathaza kakhulu emoyeni ukuthi ingabe siyababhekelela yini labo omasipala. Ngiyabonga. (Translation of isiZulu speech follows.)
[Prince M M M ZULU: Chairperson, Minister of Finance, all hon members present, the Division of Revenue Bill allows you to allocate revenue equally to all three spheres of government.
Something is always worrying me as a Zulu man. What makes me complain is when you say you will be allocating 47% to national government, 44% to provincial and local government, but where there are many people you allocate only 8,7%. Maybe we will always be faced with service delivery protests that we will not understand.
If I think about the areas to be developed, the municipality where I reside comes to mind. It's difficult to mention provincial government and say there are shortcomings there, so one always looks at the nearest local place. Hon Minister, in future you will have to look at how best you can allocate revenue to the 233 municipalities of the country. Perhaps you could give us, as national government, less than the rural people in terms of revenue.
I know it is not your task to allocate money and to monitor how it is being used. It is necessary for the Department of Police, in collaboration with the government, to check if these monies are utilised properly to the benefit of our people, as theft and corruption is rife.
Another worrying factor is whether we will realise that wonderful dream the President had of creating more jobs if about R2,47 billion is returned to National Treasury just because it is said that no proper planning was done at the lower levels to use it. I therefore request that when you meet in the dream government of national unity, you must be able to plan well so that these monies are well used to benefit all our people, rather than for it to be reclaimed, or kept, or even reallocated.
I know how difficult it is to deal with the challenges that we are faced with in this country, but I hope that with this year's Budget we might perhaps achieve something after 17 years and show that our people can develop.
Our people in the rural areas are complaining because very little is allocated to them. Let me tell you about the municipality of Nkandla, which is close to me. The amount of money required to service those more than 255 000 people is R39 million. This is exactly what worries me and makes me wonder if we really care about these municipalities. Thank you.]
Deputy Chairperson, hon Minister and hon members, it is indeed a privilege to participate in a debate in this House again, because this is where I was schooled in 2004. Deputy Chairperson, I'm not going to talk about the purpose, the role and the objectives of the Division of Revenue Bill, since I'm sure everybody in this House is well versed in it. However, allow me to raise some issues from a provincial perspective. I would also like to respond to some of the issues raised by the members of the DA, which I feel are misleading the House and the public. Before that I will complete my prepared speech.
As the Free State province, we fully support the Bill. We also support the National Treasury's proposed amendments to improve the oversight over conditional grants and agree to the rationale ... [Interjections.]
Hon member, can you just take your seat? Hon Lees, you may proceed.
On a point of order, Madam Chairperson: Is it parliamentary for a member of this House to accuse other members of the House of misleading the House without giving due evidence of such misleading?
Hon Van Rooyen, please continue with your deliberations. Hon Lees, I'll come back to you after this.
Thank you, Deputy Chairperson, I hope he listens very well when I speak.
Let me say from the start that we support the Bill. We also support the National Treasury's proposed amendments to improve the oversight over conditional grants and agree to the rationale thereof. The fundamental principles thereof are also very sound. I have to caution them, however, that the withholding of funds for underspending by provinces must be very carefully implemented, since the impact of such withholding may have severe consequences and could impact negatively on service delivery and job creation - which we all agree is government's main priority for this year.
As a province, we proposed that in terms of clause 16(3) of the Division of Revenue Bill, consideration must be given to extending the notice period from seven to 14 days, to allow provinces to make proper representation as to why the allocation should not be withheld. The important issues that must be considered by National Treasury before withholding funds include the following: the impact thereof on service delivery and, very importantly, the expectations of communities; the impact of funds for the financial commitment and other unintended financial consequences. The root cause of the underspending must be investigated thoroughly and possible alternatives or solutions must first be considered before funds are withheld.
With regard to the proposed measures to strengthen oversight over the infrastructure grants through the introduction of the new sector-specific grants, and the reasons for the splitting thereof - the so-called 40/40/20 - we understand and fully support the principles thereof. The problem we have is that the new proposed grant completely deprives the provinces of any discretion and therefore ignores provincial priorities and specific needs.
I'm of the opinion that the National Treasury's "one size fits all" approach in this regard is not in the spirit of the Intergovernmental Relations Framework Act or the Public Finance Management Act, PFMA, and could even in the extreme be considered unconstitutional.
Deputy Chairperson, allow me to raise an issue which I think needs urgent attention, namely the role and functions of provincial committees in terms of the Money Bills Amendment Procedure and Related Matters Act. The first problem is the very tight timeframes provided for by the Act with regard to the division of revenue. For example, in section 9(3) the Act requires that the Division of Revenue Bill must be passed by Parliament within 35 days. Given the fact that the annual Division of Revenue Bill is a section 76 Bill and, taking into account the six-week-cycle Rule of the NCOP, very little time is allowed for provinces to have proper public hearings, as required by the Constitution. The Division of Revenue Bill is probably the single most important Bill to be referred to provincial legislatures each year, since it is from this Bill that provinces and municipalities derive most of their annual income. Sufficient time must therefore be allowed for provinces to conduct public hearings, as prescribed by the Constitution.
The second problem is the nonexistence of any role for provincial committees in the Medium-Term Budget Policy Statement process. The process is - as we are all aware - the basis for the division of revenue. Section 6(10) of the Money Bills Amendment Procedure and Related Matters Act requires that the Committees on Appropriations of both Houses, within 30 days of the tabling of the Medium-Term Budget Policy Statement, MTBPS, report to the House on the proposed division of revenue and conditional grant allocations to provinces and municipalities.
However, and this is the bone of contention, this process is done without any reference to or input from provincial committees of finance. Surely if we all agree on the importance of the Division of Revenue Amendment Act in provinces and municipalities, then provincial committees should be allowed the space and time to participate in the MTBPS process. Without the provincial participation, the question arises: On what basis does the provincial permanent delegate participate in the NCOP select committee on this matter, considering the fact that the Division of Revenue Bill is a section 76 Bill, which in itself entails certain constitutional requirements?
The importance of the participation of provincial legislatures in the process around the MTBPS is critical in light of the fact that section 6(2) of the money amendment Bill requires that, in addition to the proposed fiscal framework for the next three years, the MTBPS also includes the proposed division of revenue between the three spheres of government, including grants. The importance of this matter - to my mind - warrants the attention of the National Speakers' Forum because I think it is not only the Free State that has a problem with that but all the other provinces too.
In conclusion, since I know the SA Local Government Association, Salga, is represented in this House, may I raise my concern regarding the level of participation of provincial Salga in the public hearings process in our province. Considering the importance of the Division of Revenue Bill for the funding of municipalities, it was - to say the least - very disappointing. I cannot believe that Salga in the Free State had no inputs of their own to make to the Bill from which the municipalities derive most of their increases.
Let me come to the issue that I said I will raise regarding the issues raised by the DA. The DA has this poster on poles everywhere you go, which says that they will provide services to all. I think it is necessary for us to really unpack this "service to all". If we look at what happens here in the Western Cape, let me start with the most obvious: "toilet without walls". Is that services to all? No! Hon Deputy Chairperson ... [Interjections.]... because it is in the township. They will not build it in other townships or ... [Interjections.]
Let me go to the second issue: They forcibly removed people from Hout Bay and left them out there. Is that services to all the people? They built the cycle lane for the rich in Milnerton. Is that service to everybody? That is why I'm saying they are misleading the public and also this House. I thank you. [Applause.]
Deputy Chairperson, on a point of order: Despite the fact that hon Van Rooyen has stopped speaking, what he was saying was not relevant to the debate and I wish you to rule on the relevance of what he has said.
Deputy Chairperson, I must say at the outset that the ANC supports the Bill. South Africa is a unitary state and that feature should inform the division of revenue. A division of revenue which is devoid of a consideration of history is unlikely to address poverty and inequality. The division of revenue should, as a developmental tool, right past wrongs and correct past imbalances.
The division of revenue ... [Interjections.] Jy moet luister, agb Lees. Jy moet mooi luister. (You need to listen, hon Lees. You need to listen carefully.)
The division of revenue should not be a means of ensuring that more of the same happens in a balanced manner, but is to be tilted towards ensuring that the gap between the formerly disadvantaged and their opposite is narrowed to its ultimate obliteration.
The allocation of resources to the three spheres of government is a critical step in the budget process, required before national government, the nine provinces and the 283 municipalities can determine their own budgets. The allocation process takes into account the powers and functions assigned to the three spheres of government. The process for making this decision is at the heart of co-operative governance as envisaged in the Constitution.
The division of revenue is a financial instrument which the ANC-led government uses to ensure that its policy programmes are brought into effect through the provision of the necessary financial resources. Given that the programmes of government are targeted towards the poor, delivery and the budget are mutually re-enforcing elements of a common objective. Hence the Division of Revenue Bill is critical in ensuring that the fiscus does meet the priorities that the ANC has set for government in terms of delivery in the various spheres of government. It is a political instrument that has a specific focus and target, informed by ANC policy and priorities.
Therefore, the five-year plan, as set out at the ANC's 52nd national conference in Polokwane, does provide key indicators which should find resonance in the Division of Revenue Bill. The ANC National Elections Manifesto of 2009 and the 2011 state of the nation address inform the Division of Revenue Bill. The Bill is one instrument to achieve these objectives and, within its allocations, to track the priorities of government, which is essential.
The decision as to where money goes is not simply a structural decision between spheres of government, but rather represents and reflects a political choice between national, provincial and local government programme priorities. Again, when we examine the horizontal division between provinces, much of what the provinces must respond to is tied to fulfilling executive mandates and upholding constitutional obligations.
With regard to the equitable share for each province, again there are deep political considerations that inform the amount each province is given under the equitable share. These considerations are rural demographics, poverty levels, population size, backlogs and key development areas within the province, as well as projects and programmes that would create jobs.
For 2011, these needs are looked after through the equitable share formulas for provincial and local government, and through specific conditional grants. The developmental needs are accounted for in the strong growth in the provincial and local government spheres of nationally raised revenue. Both the equitable share and infrastructure grant formulas are redistributive towards poorer provinces and municipalities.
The ANC government continues to invest in economic infrastructure like roads and in social infrastructure like schools, hospitals and clinics, in order to stimulate economic development and job creation so as to address economic and social disparities.
The 2011 Medium-Term Expenditure Framework, MTEF, continues to strengthen provincial and local government's ability to provide social and municipal basic services and perform their constitutional functions. It is not the Western Cape that has determined that; it is the ANC-led government that has set up a framework under which funds are allocated. It is not a miracle, therefore, that one particular Western Cape government is able to implement this, because it is part of the overall government strategy to implement this and make sure that the poor get something from the fiscus. So, the Western Cape cannot stand here and gloat about this particular provision because it has been developed by the ANC and voted for in Parliament by the ANC-led government. That is the truth. We cannot sit here and distort it. It is wrong and unfair.
On the review of the provincial equitable share formula, the ANC government has agreed to a comprehensive review of the provincial equitable share formula and a task team is currently working on this, in time for the 2011