Hon Speaker, hon members and esteemed guests, today marks the culmination of a process that was started by the Minister of Finance, when he tabled the Budget, that is, the Appropriation Bill [B3-2012].
The President set the broad principles of what the ANC-led government had to do to ensure that the five policy priorities of government were achieved. In other words, this Appropriation Bill gives effect to those priorities as identified in the ANC manifesto of 2009.
The ANC manifesto declared that:
These priorities will be tackled with all means at our disposal - the resources of government, the vision of the Freedom Charter, and the energy and commitment of our people. Our priorities will specifically target the needs of the youth, women, workers, the rural poor, the elderly and people with disabilities.
All these commitments find expression in this Appropriation Bill.
The Standing Committee on Appropriations invited the Public Service Commission, PSC, to advise as to whether the state had sufficient capacity to deliver on these responsibilities. The PSC informed the committee that, amongst others, in research conducted in 2009-10 they found that, while many departments were able to spend their budgets, there remained a gap between actual expenditure and performance on predetermined objectives. In other words, they found that, although the departments had spent their entire budget and some had received unqualified audits from the Auditor- General, the expenditure was not aligned to the annual performance plans or their measurable objectives.
Of the 13 departments that were sampled, the highest score achieved was 67%, while another department scored only 37%. This performance demands a close scrutiny of our in-year monitoring by Parliament.
The third quarter expenditure report will reveal that, although spending has improved, some departments had spent as little as 50% by the end of December, but were able to exhaust the budget three months later. That is called fiscal dumping, because, although the money had been spent, it did not achieve those predetermined objectives.
The PSC raised the failure by senior management to sign performance agreements and the lack of requisite skills. Their presentation concluded with the following observations.
Firstly, from the PSC's analysis, managerial shortcomings emerge as being a major factor. The analysis reveals that managers focus on processes and their associated emphasis on activities and outputs, while neglecting outcomes and impacts. As a consequence, programmes do not achieve their intended results.
Secondly, the lack of clear consequences for nonperformance contributes to a skewed incentive structure that has distorted downstream effects on overall public administration.
Therefore, the establishment of the Department of Performance Monitoring and Evaluation, and the subsequent directorates of monitoring and evaluation in various departments, should go a long way towards addressing these challenges.
The committee also invited the Human Sciences Research Council, HSRC, to comment on the alignment between the Budget and government's policy priorities. The HSRC viewed the Budget in a positive light with respect to broad principles, and mentioned the following.
Firstly, the Budget aims to shift investment from consumption to investments.
Secondly, the Budget reflects a commitment to bold infrastructure plans, serving the whole country through an integrated approach and speedy delivery.
Thirdly, the Budget provides increased support to the industrial policy action plan and the establishment of special economic zones.
Fourthly, the Budget invests in transport, resulting in the improved living standards of workers.
Fifthly, the Budget pays attention to rural development.
The HSRC appreciated the bold investment in education and the continual assessment of targeted grades. However, they highlighted the problem that our education system did not always result in the employment of black graduates, even those educated at the same universities as their white counterparts. Black graduates did not stand the same chances of employment as their white counterparts.
However, the investment in job creating programmes, amongst others the Expanded Public Works Programme, Working for Water, Working on Fire, the Community Works Programme, etc, were not always spent but redirected instead to other government activities. If we are to achieve the five million job opportunities over five years, Parliament must monitor the implementation of these programmes more closely.
The other important objective should be the constant review of the budgets of the new departments established in 2009. Some of these departments, for example the Department of Energy and the Department of Women, Children and People with Disabilities, have complained about their baseline budgets.
One of the achievements during this term of Parliament has been the introduction of the National Health Insurance, which will allow universal access to health care for everybody in the country.
The committee believes that the next Appropriation Bill will have to include a section that spells out clear plans for the infrastructure programmes to be introduced in the following financial year. This will avoid underspending and delays in the implementation of these programmes.
The ANC welcomes the undertaking by National Treasury in this Bill that Parliament's appropriation committees will be consulted when funds are shifted in terms of section 43(4)(b) and (c) of the Public Finance Management Act, Act 1 of 1999, as amended by Act 29 of 1999.
The ANC also welcomes the establishment of the multi agency working group on supply chain management, consisting of National Treasury, SA Revenue Service, and officials from the Financial Intelligence Centre.
We also applaud other measures that are taken to improve financial management and to root out corruption within the public sector, especially with respect to supply chain management.
In conclusion, in the state of the nation address, the President declared:
We will begin to write a new story about South Africa - the story of how, working together, we drove back unemployment and reduced economic inequality and poverty. I thank you. [Applause.]
Mr Speaker, in the debate on the Vote of the Presidency, the hon Deputy Minister, Jeremy Cronin, revealed himself to be an expert on body language. By merely looking at the more than 70 DA MPs, he managed to determine how each individual one of them enjoyed or didn't enjoy a particular speech. However, his contribution was mainly based on race and he did not really discuss the Appropriation Bill. So, unlike him, I will discuss the Appropriation Bill.
The Appropriation Bill provides money to government departments to be spent on achieving governmental priorities. Spending of the budget on the priorities set by government must not only address injustices of the past but must also lead to reconciliation, better service delivery and job creation. The question then is whether these objectives have been met with the money provided. In the case of many departments, the answer unfortunately is no.
Unlike the DA-run Western Cape government, where all departments and the province achieved clean audits, we still find a continuous stream of qualified audit reports of government entities. Incurring irregular, wasteful and unauthorised expenditure continues unabated. In the main, many government departments are failing South Africa's diverse population with service delivery.
Let us then look at the facts. At a presentation to the Standing Committee on Appropriations, the Public Service Commission informed the committee that many departments are spending their allocated budgets at year-end to fairly high levels, but fail to meet the predetermined performance objectives or outputs set by themselves in their own strategic and annual plans. I will highlight just a few of the departments mentioned by the Public Service Commission in this regard.
The SAPS, for instance, spent 100% of their budget, but only achieved 59% of their performance targets. The Department of Trade and Industry spent 93,6% of their budget, but met 51% of their targets. The Department of Justice spent 97,7% and 50% of their outputs were met. The Department of Basic Education spent 89,4%, but met only 47% of their outputs. The Department of Energy spent 97,9% of their budget, but only reached 47% of their targets. The Department of Public Works spent 89,8%, but only reached 44% of their targets.
Speaker, on a point of order: Is the hon member prepared to take a question?
Chair, if the question was going to test my intelligence, then I would have answered, but I doubt it. [Laughter.] The Department of Labour spent 99,5% of their budget, but only achieved 43% of their outputs. The Department of Rural Development spent 97,7%, but only achieved 41% of their targets. The Department of Health spent 96,6% of their budget, but achieved only 37% of their targets. The Department of Agriculture spent 97,4%, but achieved only 35% of their outputs. Almost the entire budget of these departments were spent, but they failed dismally in achieving their predetermined outputs. They nevertheless keep asking for money time and again.
Many of the departments, however, seem to be satisfied with the results achieved, as they proceeded to award themselves and their staff with performance bonuses of note, this despite their dismal failure in achieving their predetermined outputs.
Luister hierna. Die Departement van Handel en Nywerheid bereik slegs 51% van hulle doelwitte, maar betaal bonusse aan 20% van hulle personeel. Die Departement van Basiese Onderwys behaal net 47% van hulle voorafgestelde doelwitte, maar betaal bonusse aan 24% van hulle personeel. En so kan ons aangaan. Die Departement van Arbeid bereik 43,4 % van hul doelwitte en bonusse word aan 28,9% van die personeel betaal. Die Departement van Landelike Ontwikkeling het 41% van hul doelwitte bereik en bonusse word aan 29,7% van hulle personeel betaal. Die Departement van Landbou bereik 35% van hul doelwitte en bonusse word aan 33,5% van personeel betaal. Die Departement van Energie bereik 47% van hul doelwitte en bonusse word aan 36% van die personeel betaal. Die Departement van Samewerkende Regering en Tradisionele Sake bereik 44% van hul doelwitte en bonusse word aan 45% van hulle personeel betaal. Die Departement van Openbare Werke, seker die swakste departement, bereik 44% van hul doelwitte en personeelbonusse word aan 48% van hul personeel betaal. Die Departement van Minerale Sake bereik 63% van hulle doelwitte, maar betaal bonusse aan 57% van hulle personeel, en laastens, die Departement van Gesondheid bereik net 37% van hul doelwitte, maar betaal bonusse aan 50% van hulle personeel. Dit is duidelik dat resultate behaal en finansile aansporings verleen, geen korrelasie toon nie. (Translation of Afrikaans paragraph follows.)
[Listen to this. The Department of Trade and Industry achieved only 51% of their outputs, but they have paid bonuses to 20% of their staff. The Department of Basic Education achieved only 47% of their predetermined outputs, but they have paid bonuses to 24% of their staff. And so we can go on. The Department of Labour achieved 43,4% of their outputs and bonuses have been paid to 28,9% of their staff. The Department of Rural Development achieved 47% of their outputs and bonuses have been paid to 29,7% of their staff. The Department of Agriculture achieved 35% of their outputs and bonuses have been paid to 33,5% of their staff. The Department of Energy achieved 47% of their outputs and bonuses have been paid to 36% of their staff. The Department of Co-operative Governance and Traditional Affairs achieved 44% of their outputs and bonuses have been paid to 45% of their staff. The Department of Public Works, surely the weakest department, achieved 44% of their outputs and staff bonuses have been paid to 48% of their staff. The Department of Mineral Affairs achieved 63% of their outputs, but bonuses have been paid to 57% of their staff and, lastly, the Department of Health achieved only 37% of their outputs, but they have paid bonuses to 50% of their staff. It is clear that results achieved and financial incentives offered show no correlation.]
The departments advance a lack of capacity as reason for poor performance, yet they fail to fill the funded vacancies available to them. Instead, they often prefer to make use of consultants. In the few departments I have just mentioned, their consultancy fee payments amounted to nearly R870 million, yet very little skills transfer took place. It is an indictment that we have serious unemployment, yet departments fail to fill even the most basic of vacancies.
A major contributor to the problems we experience in this regard is the policy of jobs for pals, often leading to inefficient, unqualified staff members being appointed to and holding positions which they are incapable of handling. They are nevertheless protected by Cosatu at all costs, irrespective of the consequences.
Talking of Cosatu, they obviously claim constitutional rights for themselves which they begrudge everybody else. When they have protest marches, they do not only march, but also break down everything in their path and they claim this as a democratic right. When the DA marches peacefully and legally to protest about Cosatu's obstructive attitude towards job creation by way of the youth wage subsidy, Cosatu obstructs this democratic right they claim for themselves. They then forget about the poor and jobless and prefer to start hurling rocks to protect their own selfish interests.
One shouldn't be surprised, therefore, that they are not satisfied with the 5% salary increase proposed by government in this budget. They simply don't care about the excessive salary bill of government, nor do they really care about job creation, and nowhere have they come up with proposals for productivity increases linked to their salary demands. In all likelihood, they will also contest the proposals contained in the National Development Plan, as this plan wants to have a relook at the powers of trade unions and has, like the DA in its 8% growth plan, the interests of the poor and jobless as well as job creation at heart. Had it not been for the obstructionist attitude of Cosatu, 423 000 jobs could have been created for young people over the next three years. They would have been enabled to gain the necessary on-the-job experience so vital for future job opportunities.
We are sitting on a time bomb as a result of a lack of job opportunities for the youth. The Human Sciences Research Council tells us that seven out of eight youths in the age group 16 to 24 are unemployed. According to the Department of Statistics there are 9,2 million youths in this age group. It means that 8,1 million youths in this group are unemployed. A time bomb, indeed, yet Cosatu's solution to the problem seems to be to play the violin, whilst Rome is burning.
The question then is whether we should support the Appropriation Bill. If government institutions continue operating the way they currently do, it will become increasingly difficult. We must ensure higher gross domestic product, GDP, growth rates and get rid of everything that hampers economic growth. In particular, we should ensure that departments attain the predetermined outputs they have set for themselves.
This afternoon we will be considering the individual Budget Votes and my colleagues will then indicate the specific Budget Votes the DA will be opposing. I thank you.
Hon Speaker, if we have R101 billion for compensation of employees in an economic classification, it is an extraordinary budget in the context of value for money that taxpayers get from the Public Service.
In some instances the pay scales at senior management level surpasses that of equivalent private sector posts. The question I want to ask is whether, as a developmental state such as ours, we can afford an ever-increasing public sector wage bill, where we have huge leakages of funds to corruption. It was reported that in 2010 about R20 billion was lost through corruption, and in 2011 R25 billion was also lost through corrupt practices and, of course, poor services. We are not getting value for money.
As a nation, we invest about 20% of the government budget towards education. We spend more per capita GDP on education them similar middle- income developing countries, but our education system is a disgrace. Our education system is a high-cost, low-output system where there are systemic problems ranging from poor teacher salaries to poor teaching in general, underqualified teachers, poor school infrastructure and the declining quality of matriculants. Suffice to say that government has failed in this top-priority outcome. In the 2010 World Economic Forum rankings South Africa was ranked 130 out of 139 countries overall in education, and 137 out of 139 for Maths and Science education.
The Eastern Cape and Limpopo are the worst provinces in terms of provision of infrastructure and teaching. Only about 50% of learners who passed Grade 10 in 2009 made it through to the Grade 12 examination in 2011. The question is, what happened to the rest and what are we going to do about the rest? What marked improvement has the section 100 intervention had in the Limpopo education department? What has it done in the Eastern Cape education department? The Eastern Cape is in fact in deficit; there is a need to have a social partner agreement to make up the lost time in teaching during the strike period.
There is a need for life skills development courses for matriculants which will equip them with a portable skill, enabling them to compete for entry level jobs. Given the current unemployment crisis, we need to reintroduce the apprenticeship model to equip the learners for the knowledge economy.
In Limpopo, in Water Affairs, we are concerned about the scarcity of water, the water leakages and the investment in water. From Limpopo to the Free State there is a lot of uncertainty over weekends, particularly in terms of the provision of water, because the water is shut off over weekends and people don't have water. The Department of Education and the Department of Women, Children and People with Disabilities do not provide value for money in respect of their own outputs and this is, of course, questionable. The use of a consultant to perform a core function that should have been performed by the Public Service is a cause for concern, because of the jobs that are not filled but were supposed to be filled.
In conclusion, it is essential that portfolio committees carefully analyse the performance plans since we cannot continue to have instances where there are seemingly high expenditure levels but defined measurable outputs that are not being attained by the department. I thank you.
Hon Speaker, thank you very much. Hon members. The IFP will be supporting this Appropriation Bill of 2012, because we have a constitutional obligation to appropriate resources to national and subnational governments.
However, I think one wish that I have and all members of this House should have, is when we stand up to speak on the Appropriation Bill next year, we can say history has been made. History will be made when we as a committee consider the Appropriation Bill of 2013 in terms of section 10 of the Act. Section 10 of the Act requires the Appropriation Bill to receive amendments from portfolio committees to divisions or subdivisions so that we deal with those amendments, pass them on to the Ministers for comment and then come to this House and report exactly what the outcome of that was.
To a large extent, this budget - and for the last 18 years, in fact, to a total extent, I might say - has been a budget of the executive. It's not a budget of Parliament. We in Parliament represent the people and I hope that by next year, we can take the wishes of the people on the ground and consider service delivery protests and other complaints that come from people on the ground and influence the budgets of various departments. We've heard other colleagues speak about lack of delivery in certain departments, and this is something that we as Parliament need to take cognisance of. Having said that, I think when we consider appropriation we must not look at political parties and manifestos, etc, but we must look at what the actual needs on the ground are and respond to those needs in terms of giving departments whatever budgets they require. To the extent of considering the Bill and having received representations from various departments, one of the areas that I wish to raise, and I hope the Minister will have some time to respond, is that the Appropriation Bill makes provision for a 5% increase in salaries. As it is with negotiations, we see that even 6,5% is not enough and we probably would go up to 8%.We should consider the kind of impact this would have, because almost 40% of the appropriation goes to salaries and wages and we are giving more money. However the question we have to ask ourselves is whether we are getting more value for the money we are paying out in compensation of employees.
I think the second issue that arose in the committee is the Public Service Commission, PSC, report. Other members have referred to the Public Service Commission findings, but I think these findings are confirmed when we look at what happens in a province like Limpopo. We've had reports that there are vacancies in Treasury; the banking and cash management functions are not being performed adequately; and - this is a serious concern - the executive committee endorsed illegal procurement processes. I repeat, the executive committee of Limpopo endorsed illegal procurement processes, and this is a matter of serious concern. So, whilst we come here and we can hand out a trillion or two trillion rand, we have to make sure that the money is spent effectively and efficiently.
The last concern that we have is that an official of Treasury said that they were struggling to find resources for the infrastructure investment programme. Maybe, if the Minister has time, he can comment on this to find resources for the infrastructure investment programme.
The IFP, as I said earlier on, will support this Bill. Thank you.
I thank the hon member. I plead again with hon members to reduce the noise levels in the House. If people feel compelled, or you want to discuss things, please go outside and discuss them outside.
Hon Speaker, the Bill before us presents us with an opportunity to reflect upon the general management and direction of government departments as reflected by the state of their finances.
We are disappointed that expenditure on infrastructure development, which is critical for job creation, has been riddled with persistent cost overruns and underspending. As we've highlighted many times before, it is concerning to see that of the R260 billion planned infrastructure spending for 2010-11, only 68% or R178 billion was spent. This clearly points to a lack of capacity on the part of government to appropriate allocated funds, and this negatively affects the job creation agenda. Government needs to capacitate relevant entities such as state-owned enterprises, SOEs, and others to ensure that they are able to deliver on the 2012-13 infrastructure-led growth the country requires.
In conclusion, the huge public sector wage bill is a cause for concern. Compensation of public sector employees continues to outpace all other expenditure items on the Budget. Obviously, the excessively high public sector wage bill diverts resources away from service delivery.
What is even more depressing in this matter is the lack of returns on this investment. If we were getting good value for the money spent on the compensation of public sector employees, the many service delivery challenges and riots besetting South Africa today would be a thing of the past.
The UDM supports the Bill. Thank you.
Hon Speaker and hon members, today I take pleasure in reflecting on the 2012 Appropriation Bill. The 2012 Appropriation Bill was tabled in Parliament on 22 February by the Minister of Finance, hon Pravin Gordhan. In a nutshell, this Bill provides for the appropriation of money from the National Revenue Fund in terms of section 213 of the Constitution, together with section 15 of the Public Finance Management Act.
In 1965, Amlcar Cabral said: Always bear in mind that the people are not fighting for ideas, for the things in anyone's head. They are fighting to win material benefits, to live better and in peace, to see their lives go forward, to guarantee the future of their children.
A budget is a tool for transformation. The Appropriation Bill is a set of figures crafted to give effect to policy that is aimed at the incremental eradication of social and economic disparities of the past. It is a tool to develop infrastructure, grow the economy and create jobs.
Hon members, this is the Budget through which government reassures all South Africans of its commitment to change the lives of the people for the better. The 2012 Budget supports government's objectives of accelerating the pace of economic expansion and job creation, ensuring that the benefits of growth are shared more equitably and that the quality of service delivery is improved. Building a future that expresses the will of the people who have placed their faith in us to deliver on their dreams as we build a better united, nonracial, nonsexist democratic and prosperous South Africa.
Having analysed the Bill in its broader context, allow me to delve into what will be my reflection and engagement on specific issues on the following votes: Agriculture, Forestry and Fisheries - Vote No 26, Rural Development and Land Reform - Vote No 33, and also climate change.
In speaking about the Department of Agriculture, Forestry and Fisheries budget I will focus on food security and poverty alleviation. This is the heart of the socioeconomic right to food enshrined in both the Freedom Charter and the Constitution of our beloved country. Food security and poverty alleviation is not just a subject for debate. This is the ultimate measure of the harsh reality confronting our people, the most impoverished of our people. These are the same people whose unquestionable patriotism since the 1994 voting processes assured us of the democracy that we all enjoy today.
It is in this context that we welcome the budget of R5,8 billion allocated to this Budget Vote. This budget is distributed through the following programmes: administration R612,9 million; agricultural production, health and food safety, R1,9 billion; food security and reform R1,4 billion; trade promotion and market access R212 million; forestry R1,3 billion; and fisheries R411,8 million.
I must remind the hon members that the agricultural sector, of which this department is the custodian, is the only source of employment for many poor rural communities. We need to remind ourselves of the extent to which the South African economy and its growth are reliant on this sector. In our consideration of this Bill as the Standing Committee on Appropriations we noted with deep concern the findings by the Human Sciences Research Council, HSRC, suggesting that between 2000 and 2001 the agricultural sector had experienced a sharp fall in employment in primary agricultural farming, crops and livestock farming, mixed farming and forestry. The Human Sciences Research Council further observed that more households experienced food and nutrition insecurity.
Having said this, we welcome the positives mentioned by the Minister in her Budget Vote in which she mentioned that food processing and agro-industries have provided jobs demonstrating growth of over 25 000 agricultural jobs in the sector for the third quarter of 2011. A further 6 000 agriculture- related jobs were created in the fourth quarter of 2001, and this has brought total employment in the sector to 630 000.
We further welcome the noble plan by the Department of Agriculture and Forestry which will train 45 000 smallholder producers to enhance their productivity. We also welcome the Minister's commitment to invest R50 million in the promotion of agro-processing businesses.
When it comes to rural development, about half of the South African population call rural areas home and many people in urban areas have strong ties with rural areas. However, rural areas bear the brunt of poverty, joblessness and gross inequality, particularly former homeland areas where over a third of South Africans still live - plus minus 17 million people.
In 2010 an estimated 57% of the rural population lived in poverty on a monthly income of less than R570. Employment levels in rural areas are very low, with just one adult in four employed, compared to two in four in the metros. Education levels are low and 31% of working-age adults have only primary education compared to 17% in the rest of the country. Rural infrastructure is inadequate; for example, schools are more likely to lack buildings, books, administrative staff and are often underqualified educators. The government committed itself to ensuring that the country has vibrant, sustainable rural communities. A number of targets were set to be reached.
The Department of Rural Development and Land Reform directly features among the five key priorities of government as declared by the President in his 2012 state of the nation address. Similar to the Department of Agriculture, Forestry and Fisheries, this department carries the hopes and aspirations of many rural communities. The majority of these communities are directly affected by the plight of food insecurity, landlessness, poverty and joblessness.
We are of the view that the budget of R8,9 billion for Budget Vote No 33, as reflected in the Appropriation Bill, supports Outcome 7, which focuses on the creation of vibrant, equitable and sustainable rural communities. Administration gets R1,1 billion; geospatial and cadastral services R561,9 million; rural development R934,8 million; restitution R3 billion; and land reform R3,3 billion. We are confident that this department will be able to turn around the fortunes under the leadership of Mr Nkwinti of many poor rural communities.
When it comes to climate change I can just mention that there will be harvesting of 200 hectares of maize and 200 hectares of soya maize. The ongoing harvesting of at least 400 hectares of commercial crops, and the growing of 100 hectares of lucerne crops in the Free State is also welcomed.
Having spoken at length about the two departments that are the key to the issues of food security, food production, poverty alleviation and sustainable agriculture and rural development, it is only fitting that I speak about the 21st century's most fundamental issue - climate change.
Today we cannot speak of fighting socioeconomic injustice in isolation of the fight against environmental injustice. The issue of food production and food security is clearly a case in point. The funds set aside for the training of farmers, particularly small farmers, should also go towards creating environmental awareness. The millions set aside for the preservation and management of water and land resources should factor in climate change-related issues.
The executive has applied its mind to the allocation of resources to achieve policy objectives of the state. Now, the responsibility for implementation rests with the administration and its capacity to translate policy and annual performance plans into measurable gains.
In closing, hon Speaker and hon members, I shall emphasise that it is our pleasure to welcome the Budget contained in the 2012 Appropriation Bill. For all 38 departments and their respective entities our message is clear: the foundation has been laid, the soil is fertile and it is time to deliver to our people.
I thank you. [Applause.]
Speaker, hon Minister, the ACDP broadly supports the main thrust of the budget, which is about galvanising society behind a national effort to place the country on an investment-led growth path. This, as we know, resulted in a major shift from consumption spending to spending on the productive side of the economy. We are, however, living in dangerous economic times, as Minister Gordhan said in his Budget Speeh, with serious sovereign debt fears in Eurozone countries, which will have an impact on South Africa. Such uncertain times require boldness, courage and vision. Leaders are dealers in hope. We must bring hope to the unemployed, the poor and every South African.
It is also crucial, of course, to address wasteful and irregular expenditure and corruption, considering that government expenditure will, for the first time, reach the R1 trillion mark. An amount of R25 billion rand to R30 billion is estimated to be lost annually to procurement fraud and corruption.
The ACDP shares the concerns expressed by the appropriations committee in its report, particularly regarding the nonattainment of performance targets and capital underspending.
Lastly, however, it remains the responsibility of each of us to ensure that government departments spend their money efficiently and meet those performance targets. Let us, as parliamentarians, be vigilant on an ongoing basis to prevent fraud, corruption and irregular and wasteful expenditure. We can do this by monitoring quarterly expenditure patterns in every department. I thank you.
Somlomo, maLungu ePalamente, Baphathiswa nooSekela- Baphathiswa, neendwendwe ezikhoyo, bhotani. Simothulela umnqwazi urhulumente welizwe okhokelwa ngumbutho wabantu i-ANC, nobhexeshwa ngunyana kaTata uMsholozi, uMongameli uZuma ukutsho, ngokuthi thaca iqhosha elingenantuja, imali ke ukutsho, engaphaya kwamakhulu amahlanu anamashumi amane anesithathu amawaka ezigidi-gidi zeerandi - R543,6 billion ngolwasemzini nto leyo ebonakalisa uchatha kuHlahlo-lwabiwo-mali lwanyakenye - 2011-12 financial year - ngolwamadlagusha. (Translation of isiXhosa paragraph follows.)
[Mrs L E YENGENI: Hon Speaker, hon Members of Parliament, hon Ministers and hon Deputy Ministers, visitors present here, I greet you. We commend the ANC-led national government, under the leadership of Mr Msholozi, meaning the hon President Zuma, for providing money, over five hundred and forty- three billion rand - R543,6 billion, something which shows an increase on the previous financial year's Budget - in English, the 2011-12 financial year.]
We have noted that at least more than 60% of this budget has been allocated for transfers and subsidies; less than 39% for current payments; and only 2% for capital expenditure. The responsibility lies in the hands of these departmental officials to spend the available budget according to plans - efficiently, effectively and economically, and in line with the Public Finance Management Act, Municipal Finance Management Act and Supply Chain Policy.
We have noted the increasing trend of mismanagement of funds, which includes unauthorised expenditure, wasteful expenditure, fruitless expenditure and noncompliance with law and regulations. Unlawful expenditure has a direct impact on our appropriated Budget and affects the delivery of services negatively because the department is then unable to achieve all performance targets as planned. We have noted the increasing trend of misalignment between the budget spent and the strategic plans of government departments. For instance, certain departments will spend 100% of their budget; whereas they will only achieve 60% or less on their performance targets. This needs urgent attention.
This does not give our government value for money. We have noted the cost escalation in some of the major infrastructure projects, like the Accelerated Schools Infrastructure Delivery Initiative, Asidi, project in the Eastern Cape, Public Works projects, newly built prisons in the Northern Cape, the revamped and maintained prisons, hospital revitalisation projects - which are the key programmes for us to be able to implement the National Health Insurance - to name a few, and we are concerned as the ANC component in that committee.
The escalation of major infrastructure projects is a major concern, taking into account the fact that the Supply Chain Policy provides for a three- quote process before the procurement can be made. It further provides for government to take the lowest bidder; still there is not much of a difference. Maybe we need to pose a question to National Treasury as to how this three-quote system helps the government to achieve its intended objective, with minimum costs and, at the same time, obtain value for money.
The reason why we need to ask this question is that most, if not all, projects are quoted and the lowest quote is taken, but surprisingly the lowest cost has become even much higher than the one which was the highest to begin with. These figures are manipulated intentionally by the private sector because there is no competition. They know that they are the only stakeholders that the government is using or that have the capacity to deliver in most of these major infrastructure projects, on behalf of the government.
Our government is always a loser or gets ripped off by these companies. That is a serious financial and economic challenge. I call upon Treasury and the government to look into this challenge as a matter of urgency, since this has been declared the year of infrastructure development by the hon President. Should this challenge be left unattended, monopoly capital will continue to make a 100% surplus or even more at the expense of our poor people.
In most instances these cost escalations are a clear element of corrupt tendencies by DA constituencies. It is also understandable why those peacetime politicians, who claim to be advocates of anticorruption, are mum and pretend to be blind when it comes to these corrupt tendencies. In fact, the word corruption has been selectively used and deliberately abused by antidemocratic forces of Helen Zille ... [Interjections.] [Applause.] ... in alliance with hon Mosiuoa Lekota, whose political reactionary posture resembles that of Hitler in Nazi Germany. [Interjections.] [Applause.] For instance, issues of irregular and fruitless expenditure do not necessarily amount to corruption, but are issues of compliance. [Interjections.]
Kuyafuneka ke ukuba singenise isikolo koogxa bethu abasekunene, ingakumbi ngala magama ezopolitiko ... [Uwelewele.] ... igama lorhwaphilizo ... [We need to teach our fellow colleagues on my right, especially when it comes to political terms ... [Interjections.] ... the term corruption ...]
Order, hon members! Is that a point of order, sir?
Speaker, is it parliamentary for the hon member to accuse another member of being a Nazi in Parliament? [Interjections.] I want you to make a ruling on that.
I will study the Hansard and come back with the ruling. Continue, hon member.
I said it resembles. [Interjections.]
Kuyafuneka ke ukuba ... [Uwelewele.] ... sibancedise aba gxa bethu basekunene ... [There is a need to ... [Interjections.] ... assist our colleagues on my right ...]
Order, hon members, order!
Imizuzu yam ndiyifumane, Somlomo. Kufuneka sibafundise amagama opolitiko kuba kaloku le nto ilupolitiko bayibambe emsileni. Ingakumbi igama lorhwaphilizo kuba kaloku asisenakuzonwaya singenakuthimla; yonke into lurhwaphilizo. Nokuba kugqitha uhodoshe, lurhwaphilizo olo. [Uwelewele.] (Translation of isiXhosa paragraph follows.)
[Mrs L E YENGENI: Hon Speaker, I must get my minutes back. We need to teach them political terms because they are new to politics. This applies to the term corruption in particular; it seems that we can no longer have a relaxed moment or sneeze for that matter because everything is corruption to them. Even if a carrion fly flies by, that is also called corruption.]
We have observed some sections in the Public Finance Management Act that are in contradiction with some sections in the Appropriation Bill. Section 43(2)(a)(b)(c) does not authorise the shifting of virements of transfers earmarked for particular urgency, as well as allocations earmarked for capital payments to defray current payment. However, we have observed that section 5 of the Appropriation Bill comes up with opposite provisions, which makes our work very difficult. These contradictions compromise our oversight function.
Another important observation is that Parliament approves the Appropriation Bill, but when departments are doing shifting and virements, Parliament does not get involved. There are a lot of gaps and challenges, such as tight timeframes for Parliament to consider and pass legislation.
Coming to the Department of Education - I will take one department out of many. Whilst we applaud the Department of Higher Education and Training for the introduction of financial support schemes in technical colleges, and for dealing with the issue of access to education, there has been ongoing concern regarding the allocation of funds to universities and universities of technology.
According to the Appropriation Bill, allocations to former white universities remain high, whilst those that are earmarked for former black universities remain low. This calls for a review of the allocation formulae. Some of these universities have enough resources, to the extent that they can even run without government's intervention or the National Student Financial Aid Scheme, NSFAS, while the former black universities still have a backlog of students who do not receive financial aid because of inadequate allocations. For instance, the allocation that goes to the University of Cape Town is R974 million versus the University of the Western Cape's R570 million; the University of Stellenbosch receives R975 million versus the University of Zululand's R306 million. I can go on; it remains the same.
Whilst a long, hard struggle took place in this country and resulted in a Constitution that upholds the noble principles of nonracialism and nonsexism, it is disgraceful to note that racism in the province of the Western Cape ... [Interjections.] ... is not only alive and kicking, but is growing at an alarming rate. The government of the DA in the Western Cape is busy promoting and entrenching the culture and politics of divide and rule. They are busy turning the wheel backwards, eroding all the gains of our struggle for freedom and justice.
How else do you explain the racist outburst of the premier of this province, Helen Zille, calling black South Africans in this province refugees? No one condemned those ... [Interjections.]
Hon member, hold on; there is a point of order.
The speaker is deliberately misquoting the Premier of the Western Cape. [Interjections.] She never, ever called black people refugees; she spoke about refugee students. [Interjections.]
Hon member, that is not a point of order.
No one condemned those potently racist comments, including the DA's parliamentary leader, Ms Lindiwe Mazibuko. [Interjections.] Ms Mazibuko's courage to stand up for her own people failed her at a crucial moment. [Interjections.] We all shudder to think what the DA's future will be in the hands of hon Mazibuko. [Interjections.] This insult directed at all black people of this province must be rejected with the contempt it deserves ... [Applause.] ... and it must haunt Madame Zille until she takes it back and apologises unreservedly to all our people.
The delivery of services in the Western Cape is also done in a very skewed and racial manner. Those people who live in townships and squatter areas are given inferior, substandard service. In Grabouw we witnessed an ugly fight, with racial undertones, between two communities, where one community was given a good school, while the other was given an inappropriate and inadequate structure. [Interjections.] Instead of addressing ...
Hon member, just hold on; there is a point of order. What is your point of order, sir?
Hon Speaker, although these are political debates, there is a Rule that we should stick to the subject. [Interjections.] The subject is not the budget of the Western Cape; it is the Budget of this government, which has failed dismally.
Instead of addressing this massive backlog in housing delivery, squatter areas are, in fact, growing in this province. There are amatyotyombe [shacks] everywhere in this province. [Interjections.] This is not the working and successful province that we are made to believe by the DA, but a province ... [Interjections.] ... yamatyotyome [of shacks]. [Interjections.]
Order, hon members! Hon members, order!
In this cold, biting winter women and children are forced to live in squatter areas ... [Interjections.]
Hon member, hold on. Is that a point of order, sir?
Is the hon member prepared to take a question? [Interjections.]
Hon member? The answer is no, sir. Continue, member.
There are amatyotyombe [shacks] everywhere in this province. This is not the working and successful province that we are made to believe by the DA, but a province yamatyotyombe [of shacks]. In this cold winter women and children are forced to live in squatter areas that are flooded with stagnant water from the notorious winter rains of this province.
Hold on, hon member. Yes, sir; what point are you rising on?
Is the hon member aware that Premier Helen Zille is the best premier in the country? [Interjections.] [Applause.]
That is not a point of order. Order, hon members! Continue, hon member.
The absence of transformation and inclusiveness across all sectors in the Western Cape is a worrying factor that must be addressed frontally. Whilst the DA likes to boast about clean audits in its government, as they have done this morning, those clean audits have no bearing on the lives of those who are stewing in squalor and those in townships. [Interjections.] It is no exaggeration to say that living conditions in the black and coloured townships are really bad and devastating.
The DA government can no longer be allowed to make lame excuses ... [Interjections.]
Hon speaker, that hon member there is making this gesture, and that gesture means that somebody is a baboon. I do not know who he is referring to. [Interjections.] Who is he referring to?
Listen. The DA government can no longer be allowed to make lame excuses for their failures. They must be held fully accountable by the voters and the poor masses of this province. [Interjections.]
Order, hon members, order!
The DA like to parade as fighters against corruption, but recently the Public Protector found out that ... [Interjections.] ... DA advisers, with their fingers, dip into the cookie jar. Madame Zille tried to intimidate the Public Protector by threatening her with a lawsuit. [Interjections.] We condemned outright the presence of DA advisers in the committee that awarded the contract in question. [Interjections.] [Applause.]
This kind of behaviour smells of corruption by the DA advisers. The full might of the law must be brought into play in its full role. [Interjections.] The DA must be made to appreciate and understand that this is South Africa, which is part and parcel of the continent of Africa. [Interjections.] Africans must be respected and treated with dignity, and not insulted. I thank you. [Applause.]
Mr Speaker, the hon member is misleading the House. [Interjections.] There was no corruption found by the Public Protector.
That is not a point of order. Please take your seat. I now wish to invite the hon Minister to address the House.
No, sorry. Mr Speaker, if someone misleads the House deliberately it is a point of order, and I would like you to make a ruling on that. [Interjections.] There was no corruption found in the Public Protector's report. Will you please make a ruling on that? [Interjections.]
Please take your seat. Hon Minister, continue.
Mr Speaker, sorry, I'm still standing.
Speaker, on a point of order. Whenever a member accuses another member of deliberately misleading the House, it has been ruled before that it amounts to accusing that member of lying ... [Interjections.] ... and that is unparliamentary, and that member must be forced to withdraw that statement. [Interjections.] I ask for your ruling, Speaker.
I will study the Hansard and come back with the ruling. Minister, you have the floor.
Mr Speaker, sorry. On the previous point, the hon member deliberately misled this House by referring to the Premier of the Western Cape as being corrupt. There was no corruption in that report.
Hon member, I did say that I am going to study the Hansard and come back with the ruling. Please take your seat. Minister, continue.
You did not, but thank you very much.
Hon Speaker and hon members, thank you for an exciting debate. Normally appropriation debates are very boring. I want to remind one of the hon members about what was said here on the platform. In the Budget we said that we are living in dangerous times. Well, six or four months later we are living in even more dangerous times. So issues of budgeting, appropriation, how we spend our money and how we prioritise for things that we want to prioritise are becoming even more important than they were during the time of the budget.
It is important for us as hon members, regardless of the political parties that we belong to, to understand very carefully and very clearly the developments that are unfolding around us, particularly in Europe and what potential impact they could have on our economy, job situation, growth prospects and indeed on the fiscal balances and frameworks that we have been trying to sustain going forward.
We might choose to play political football with these issues, but let me appeal that there must be some space created somewhere for us on a nonpartisan basis to understand these challenges and begin to act in the national interest outside of the political battles that we want to fight.
In the South African context we must continually ask these questions, as the appropriations committee has asked: What are our priorities; are we spending money on those priorities; are we spending that money effectively; and are we in the public sector, as the Public Service Commission asks, having a management cadre that both understands those priorities and has the capabilities to deliver and use the R1 trillion that we speak of as effectively as they should?
Mr Speaker, in the Budget we made it very clear that we want to change the composition of spending in South Africa. We've started that process, but there is a long way to go. Investment in infrastructure and in other capital projects still doesn't get as much money as it requires, and even where we do have that money, regrettably we don't spend it as effectively as we should.
Secondly, we've said that, given the crisis and our own structural constraints, we need to restructure our economy to overcome as quickly as possible the constraints that our economy faces and, more importantly, utilise our own creativity to take advantage of the opportunities that we have around us. But we are not doing remarkably well on that front, although there is some progress to be noted. We've taken measures in the Budget to support the competitiveness of our economy and the manufacturing sector in particular and we have begun to see progress in terms of the allocation of those funds and the setting out of criteria.
As many hon members have pointed out, the essence of spending this money is to ensure that the appropriate level of service delivery occurs and that millions of South Africans are the beneficiaries of this service delivery. I am sure that a lot of that is happening effectively, but there is room for improvement, as all of us would acknowledge.
I want to thank the hon Sogoni and his team for the excellent work that they have done in preparing Parliament for this particular process. Their job becomes even more important as we go forward, as they are beginning to ask tougher questions to the departments. Are you actually creating jobs as a result of what you do? Are you delivering on a value-for-money basis? Are you ensuring that procurement happens in the right way? Is capital investment happening as it should happen and as many hon members pointed out, and as the Public Service Commission did? Are we able to reconcile expenditure with performance outputs? Clearly, there is progress in this particular regard, but we need to be tougher on ourselves to ensure that we do deliver what we promised to deliver in our plans.
Most importantly, the key focus, as I said earlier, needs to be an evaluation, as some of the hon members have pointed out, as to whether our spending of money results in a change in people's lives for the better. That should be the sole criterion in terms of evaluating our performance. Secondly, whether we are adequately restructuring our economy, both in terms of infrastructure delivery and removing the bottlenecks in our economy and, more importantly, restructuring our economy so that we overcome our own history and lack of employment within our economy. Here again, the role of the appropriations committee and the various portfolio committees is an extremely important one.
I would certainly support all of you who indicated that we need to hold departments and officials to account on a much more rigorous basis than we do. We need to stop fiscal dumping and senseless spending just because we want to show that we have 100% spending taking place.
There is an interesting shift that happened over the last year or two in as much as we used to focus on the quantum of spending. We need to start asking questions about the quality of spending and what it is that we are actually achieving.
Again, all of us, regardless of our interests, need to ask some tougher questions about ourselves, particularly in an economic context where there could be further negative impacts on revenue collection in the coming year if Europe does not sort out its problems, as it is giving no evidence that it is doing so faster than it has been able to do up to this point in time.
We appeal to all of us in Parliament, various departments, to my colleagues and the executive as well to keep a more watchful eye on how money is being spent and on how we undertake more rigorous exercises to save more money and redirect our money in the best possible way.
We need to, of course, constantly remind ourselves that this is taxpayers' money that we are talking about and that taxpayers are becoming impatient with the fact that we are not adequately providing value for money.
The criticism that is made of the private sector during the course of this debate is also a valid one. There is ample evidence that there are two sides to any transaction and that the business sector in South Africa needs to up its game. They need to come to the party in terms of the way in which costing takes place in relation to services and goods provided to government. Higher levels of integrity are required if we are going to meet some of the challenges that we face.
A number of hon members have talked about looking at the baseline budgets of new departments. We will certainly have a look at some of them in the new budget cycle. But I also think we have to get used to the idea that Europe and the European crisis, and the fact that there are lower growth patterns throughout the world today, does mean that we must have lower expectations about what our budgets could look like and how effectively we spend the money that we actually have available to us at this particular point in time. Several hon members have pointed out various leakage points in our fiscal system, and those are issues that we will certainly look at.
As far as changes in the composition of expenditure and the wage bill are concerned, as you know the negotiations are ongoing in the relevant chamber at this point in time and all we hope for is that we find the right balance between ensuring changes in composition and rewarding public servants in an appropriate way.
Hon Singh made reference to vacancies in the Limpopo Treasury. There is a very good turnaround process in Limpopo and certainly in Treasury. I cannot speak for the other departments, but those vacancies will certainly be filled in the near future.
Hon Gelderblom gave us an important reminder by quoting Amlcar Cabral that the masses are not fighting for ideas, they are fighting for material benefits. Our task as government, whether local, provincial or national, is to ensure that on a continuous basis this R1 trillion Budget is spent in a way in which ordinary folk on the ground can see a meaningful change in their lives as a result of the kind of service delivery that we undertake.
We would certainly take up hon Yengeni's point that there needs to be a better alignment between spending on the one hand and performance targets on the other.
Let me conclude by thanking all the parties for their support for this Bill and for the various contributions that they have made to improve the way in which we spend funds within government. I thank the hon Sogoni and his team for their contribution as well.
Thank you, hon Speaker.
Debate concluded.
Bill read a first time (Democratic Alliance dissenting).
Business suspended at 12:24 and resumed at 14:04.