Speaker, hon members, comrades and compatriots, the ANC welcomes the 2012-13 Division of Revenue Bill, Bill No 4 of 2012, tabled by hon Pravin Gordhan, the Minister of Finance, who has boldly steered the ship in these stormy economic waters.
This Budget was delivered in the context of what the President said when he issued the orders by which to achieve the policy objectives of the ANC in order to defeat the triple challenge of unemployment, poverty and inequality. For the majority of South Africans, the resources provided in this Division of Revenue Bill should go a long way in eroding the triple challenge the President spoke about.
In this record Budget of a trillion rand over the Medium-Term Expenditure Framework, MTEF, the ANC-led government is making a bold statement of intention to deliver on the commitments we made in the 2009 manifesto to create jobs and improve public infrastructure and service delivery. Though we are living in challenging times in terms of the global economic outlook, our country continues to experience growth - small as it may be - thus resulting in the average growth of the Budget of 8,2%, though slower than the period between 2008-09 to 2010-11 period, when the Budget was growing by 11,1%.
The challenge facing our government at all levels is to achieve more efficiently and economically with these limited resources. This also challenges us as Parliament to improve on oversight.
This Division of Revenue Bill introduces new grants intended to build capacity to deliver efficiently and on time: one, the schools infrastructure backlog grant, implemented nationally; and, two, the infrastructure skills development grant, which is to be administered by National Treasury and is intended to support municipalities to create a long-term and sustainable pool of young professionals with technical and operational skills through deploying graduate engineers and scientists as interns in municipalities.
Furthermore, the Bill introduced the provincial disaster grants for the Department of Co-operative Governance and Traditional Affairs, which is intended proactively to respond to immediate needs after a disaster has occurred; and the devolution of the property rates funds grant, administered by the national Department of Public Works to enable provinces to pay rates. During the hearings the SA Local Government Association, Salga, informed the Standing Committee on Appropriations that some national and provincial departments were not paying for services. We are aware that the provinces also feel that the billing system is not accurate and that poses a challenge between the departments and the municipalities.
Further, the Expanded Public Works Programme is a huge grant as it is now also extended to include the social sector. Properly implemented, it has huge potential to absorb a lot of unemployed people - though the challenge, according to Salga, is allowances that vary from province to province. Salga informed us that the Western Cape was paying less in some areas and even within the Western Cape they were not paying the same amounts. These amounts are gazetted in the Public Works ...
HON MEMBERS: Like where? Prove it!
You will get the report. Don't worry. [Interjections.]
The sixth grant is the provincial road maintenance grant, which is intended to ensure efficient investment in provincial roads. Former President Mbeki once said:
... none of the great social problems we have to solve is capable of resolution outside the context context of the creation of jobs and the alleviation and eradication of poverty ... This relates to everything from the health of our people to reducing the levels of crime, raising the levels of literacy and numeracy and opening doors of learning and culture to all.
Another important grant intended to change the lives of rural people is the rural household infrastructure grant, which will soon be integrated into the municipal infrastructure grant, MIG. The objective of this grant is to eliminate backlogs in water and sanitation in rural households. However, it is of concern to note that this grant, administered by the Department of Human Settlements, is underperforming.
The Portfolio Committee on Human Settlements, Salga and the Standing Committee on Appropriations are of the view that before the grant is integrated into the MIG, there must be engagement first because the MIG is underperforming. It may not necessarily solve the problem if we move this grant to MIG without understanding what the issues are. Luckily, this transfer will only take place in the 2014-15 financial year. So there's still room for such engagement.
This 2012-13 Budget is intended to reach and touch every person in all corners of our country - the President demonstrated the policy objectives of the government through the projects spread around the country. These programmes are testimony to this statement once made by the ANC:
We pledge to all the heroes and heroines who sacrificed for our freedom, as well as to all our friends from the rest of the world, that we will never betray the trust you bestowed upon us when you helped to give us the possibility to transform South Africa into a democratic, nonracial, nonsexist and prosperous country committed to the noble vision of human solidarity.
With these initiatives taken by our government and supported by all of us, we should have no problem achieving a better life for all. Obviously, the struggle continues towards creating a better life but looking at the Mid- term Review, it is clear that a lot has been achieved.
Another important element of the Division of Revenue Bill included in the Local Government Equitable Share is the support by government for ensuring that the poor citizens of our country have access to basic services. People who qualify are those who earn R800 and less. This calculation was based on the 2001 Census, which means that it is likely to be revised once the 2011 Census results have been published.
Finally, this Division of Revenue Bill proposes in section 15 that the National Treasury will have to consult Parliament on changes proposed in terms of virements and introduces a great improvement in the current consultative arrangements between National Treasury and Parliament. To conclude, I wish to remind this House that the Budget tabled by the ANC- led government should undermine the triple challenge confronting us as a caring government. This Budget also reminds me of the words of one of our colleagues, Deputy Minister Ebrahim - unfortunately he is not here - who once said in court when he was being sentenced:
If I were to choose my life all over again, I would follow the same path. I could never have remained indifferent to the poverty and suffering of our people. I have a deep commitment to peace, freedom and prosperity for all fellow human beings and have an equal distaste for injustice and oppression.
He was speaking on behalf of all of us on right-hand side of the House. [Interjections.]
Speaker, may I take this opportunity to thank the members of the Standing Committee on Appropriations, the staff of the committee and my secretary for their commitment to ensuring that the hearings and the report of the Division of Revenue Bill were processed and completed on time. My special gratitude goes to Ms Thoko Xaso, who is leaving the committee at the end of March. We valued her commitment and support to the committee and to me. [Applause.]
Mr Speaker, the Division of Revenue Bill provides for the distribution of nationally raised revenue between the three spheres of government. This year, the relevant amounts are R622,43 billion to national government, R309,05 billion to provinces and R37,87 billion to local government.
South Africa needs to create jobs and eradicate poverty. This can only be achieved by a much higher GDP growth rate. Our current growth rate and the growth rate forecast for the Medium-Term Expenditure Framework, MTEF, is simply not sufficient for achieving this goal.
The DA in its alternative budget focuses on ways in which the national Budget could be structured to achieve an 8% GDP growth rate on a sustainable basis. Such a growth rate is not only required for job creation and poverty eradication but is also necessary to ensure credibility as a Brazil, Russia, India, China, Bric, partner. We have to work smarter and harder and create a streamlined government. We need to eliminate wastage resulting, in the main, from inefficient service delivery by a large number of politically well-connected but poorly performing public servants.
In this regard, a report by the Public Service Commission found that 1 135 cases of financial misconduct were committed by public servants during the 2009-10 financial year, involving an amount of R346 million. The financial misconduct was found in 39 national departments and 9 provincial departments. When reflecting on the performance of some state employees, the following two examples illustrate the point of inefficient service delivery.
In the first example, water pipes to the value of some R200 million will have to be replaced at the Nandoni Dam project in Limpopo. This is because the engineers employed by the relevant departments specified the installation of glass-reinforced instead of steel pipes. They then failed to do quality tests on the glass-reinforced pipes before installation, resulting in these pipes bursting when placed under pressure. The pipes are substandard and will have to be replaced at a cost of R200 million. [Interjections.]
A second example is the way in which private businesses are being disadvantaged by the nonpayment of their accounts in respect of goods and services delivered to the state. At the end of February the department of health in Gauteng, for instance, owed R2,89 billion to its suppliers and the amount is increasing. How do we expect suppliers to survive and continue doing business with the government under these circumstances? [Interjections.]
To ensure a leaner government, the DA's alternative budget provides for the abolition of a number of government departments and institutions, such as the Department of Women, Children and People with Disabilities, as well as Setas. In this way, we can create a more streamlined government and free up money to help accelerate growth and tackle poverty. [Interjections.] To achieve the goal of a more streamlined government, the DA's government budget proposes, inter alia, the abolition of district municipalities. This would lead to an annual saving of R500 million. This is a proposal supported by the ANC's recently released discussion documents and something they can accept in those documents. [Interjections.]
There just are far too many government departments and institutions and there is reason to be concerned about the excessively high wage component in government expenditure. A good example of this is the department of health in Limpopo, which spends 73% of its budget on salaries. No wonder they have been placed under administration.
The President in the 2012 state of the nation address and the hon Minister of Finance in his Budget Speech this year quite correctly placed great emphasis on job creation and poverty alleviation by way of infrastructurel development. However, the question remains whether the three spheres of government have both the ability and/or capacity to spend the money now allocated to them in the Division of Revenue Bill. In this regard, it is interesting to note that at the end of the third quarter of the 2011-12 financial year, provinces had in aggregate spent only 61,5% of their combined capital adjusted budgets. Similarly, municipalities underspent by R28,4 billion for the financial period ending 30 June. Of this amount, R12,4 billion was underspent on capital budgets.
Investment is critical if we are to stimulate growth and job creation. The ANC government seems to be intent on shooting itself in the foot with regard to procuring investment for the economy by pushing for legislation such as the Protection of State Information Bill - the Secrecy Bill - tampering with concepts such as willing-buyer, willing-seller, undermining the independence of the judiciary and generally seeking to tamper with the Constitution. In addition, the ANC's tripartite alliance partner, Cosatu, sees fit to stage massive strikes, costing business and the country billions of rands.
Where, then, do we find ourselves? On the one hand we have a Budget and a Division of Revenue Bill worthy of support. On the other hand we face a range of challenges. We can, however, deliver opportunities and a brighter future for all our citizens by tackling government inefficiency, promoting and protecting the values on which our democracy is built and improving service delivery. [Applause.]
Speaker, Ministers and hon members, Parliament is dealing with the Budget in compliance with the Money Bills Amendment Procedure and Related Matters Act, Act 9 of 2009. There is a provision in this Act that directed Parliament to establish a Budget Office in order to help Parliament's committees to amend the Budget and engage with government. We have spoken about this delay in Parliament implementing its own law. To date, however, there has been no progress in this regard. Parliament's committees are expected to engage with Ministers of Finance as well as government on the Budget, but the committees suffer from a lack of capacity, especially the Appropriations committee.
It is unclear what the consequences will be when Parliament fails to comply with this Act. It is an Act initiated by Parliament and passed by Parliament to be implemented by Parliament itself. As a committee of Parliament, we are indeed inadequately resourced. In order for us to deal with this we need research capacity, economic capacity and a budget analyst, to mention but a few.
In the committee we discussed the Budget and government's main priority in detail. Nonetheless we believe that the key priorities remain critical for our country. There are, however, various weaknesses in government's expenditure pattern. This implicates government's lack of capacity to implement the required system and structures. The Department of Basic Education is a good example in this regard. At local government level, service delivery protests remain the order of the day. This is further fuelled by the heads of department worrying about trying to fulfil the executive authority's political wishes, not whipping officials to deliver quality service to our people.
The Department of Public Works is another case in point. This department is supposed to be a driver behind job creation, yet it is stained with lease scandals and corruption. All of us as Members of Parliament should be intolerant of poor management, corruption in the management of tenders by state officials and underspending by departments and provinces. The Department of Health is the worst and most worrying department. Not only is it insufficiently capacitated, but its system seriously lacks compliance.
We were told that the country will not meet the Millennium Development Goals, especially the one relating to maternal and infant mortality below the age of five years. This is unacceptable. Provinces are refusing to comply with national priorities because they have their own priorities. President Zuma's performance agreement, which should become the marshalling force for service delivery, will never see the light of day if the provinces' to adhere to this performance agreement remains unattended to.
The main problem is that money is not spent on quality projects. In addition, the state's ability to implement government priorities remains very weak. Departments continue to employ consultants to do work they are supposed to be doing. Limpopo is a good case in point. The Free State is not too far behind in this regard. More worrying is the lack of skilled personnel in the health sector. We warned beforehand that budget approval should not communicate a message to government departments that it is their time to eat. We have seen officials in Limpopo squandering government and taxpayer's money as if it were their personal chequebook. This is worrying, to say the least. In conclusion, Cope supported the fiscal policy and we support the Division of Revenue Bill but, Minister, help us to protect those brave officials who stand up against corruption and blow the whistle. Tell the premiers, including the Premier of the Free State, not to victimise those who come forward and blow the whistle against corruption. Cope supports the Bill. [Time expired.] [Applause.]
Madam Deputy Speaker, I want to thank the ANC for the extra one minute that they have given me to speak, otherwise the division of speaking time in this Division of Revenue Bill would have left a lot to be desired.
Having said that, as the IFP, we will support this Bill in so far as the recommendations contained in it are concerned. I want to concur with the previous speaker that, as Parliament, we are failing ourselves when it comes to capacitating ourselves to deal with budgets. We should have a budget office up and running but it does not exist. We should have more staff assigned to the Appropriations committee to deal with the budgets, but that does not exit either. I hope that this matter will be addressed sooner rather than later, otherwise what happens is that this becomes a Budget of the Cabinet and the executive, and not a Budget of this Parliament. Yet the Act provides that we as parliamentarians should have a say in the Budget and proposed amendments.
Having said that, one of our concerns is the underspending of conditional grants. We believe that there is not enough centralised monitoring and evaluation over conditional grants that are given either to provinces or to municipalities. There is a lot of underspending by municipalities. For example, the department of local government has a budget of R47 billion. Of that, R46 billion is for transfers and subsidies. Yet when we met them they didn't have much of a clue about how those monies were being spent at grass- roots level. There has to be effective control and a holistic system at Treasury to ensure that this money is effectively utilised on the ground.
We want to welcome the Section 100 interventions in many of the municipalities and we compliment the Treasury and the Ministry of Finance for being brave enough to go in there and do whatever they had to do. To that end, eThekwini Municipality is also one of the municipalities that, in terms of the Division of Revenue Act, receives a lot of money from this national Budget. Yet we know from media reports and from what is called the Manase report that there are a lot of shenanigans - if I may use that word - taking place within the eThekwini Municipality.
Hon Deputy Minister, we made an appeal to the Minister for Co-operative Governance and Traditional Affairs, Cogta, during statement time in this House, that the Manase report should be released to this House because we have an interest in it. Money appropriated from here goes down to eThekwini and any other municipality, for that matter. Deputy Minister, I hope that this appeal to you will not fall on deaf ears and that the Manase report will be made available to us as Members of Parliament, so that we can see what is going wrong in the Durban area.
The Department of Health expressed to us the major concerns they had with provinces and the hospital grants. We need to assist the Department of Health and other government departments to ensure that the money is spent properly at the lower levels. I see my time is up. Thank you very much, Madam Deputy Speaker. We will support the Bill. [Applause.]
Deputy Speaker and members, the division of revenue is the first step in the service delivery process. Logic dictates that a large proportion of the revenue should be channelled towards the provinces and municipalities. While these two tiers of government have constitutional service delivery mandates, they have proven to be both wasteful and ineffective over the years, especially the provincial government system.
Provinces, by virtue of their proximity to the people, are supposed to be closely attuned to the service delivery needs of the people. Unfortunately, with the exception of one or two well-run provinces, the opposite is true. Since the inception of our democracy, we have witnessed a distinct inability among provincial and municipal administrations to manage this revenue and deliver services.
The problem here stems from a severe lack of skills, coupled with an institutional culture that celebrates ineptitude. However, we are encouraged by the Finance Minister's announcements that in order to fight irregular expenditure and tender fraud, government will intensify its efforts to monitor expenditure at provincial and local spheres of government. We demand value for money!
One of the key reasons why the division of revenue does not produce the intended results is the failure to consider the limited revenue-raising potential and capacity of rural municipalities when allocations are made. The majority of rural municipalities operate on a shoestring budget. This situation needs to be changed as it is responsible for the deterioration in the quality of life of rural people.
The UDM believes that if government is serious about improving both the speed and quality of service delivery and, if it wants to "do more with less", as the Minister of Finance has said on numerous occasions, it has to do away with its cadre deployment policy, in terms of which political affiliation rather than merit remains the fundamental basis upon which people are appointed to positions of power. The deficit in competent and qualified people besetting all spheres of government can be attributed to nothing else than the cadre deployment policy. These are the people the country needs ...
The UDM supports the Bill. [Time expired.]
Agb Adjunkspeaker, in terme van die Begroting word R77,3 miljard toegedeel aan plaaslike regerings, maar as ons gaan kyk op plaaslike regeringsvlak, dan sien ons die agterstallige skulde in terme van dienstegelde beloop meer as R60 miljard. Met ander woorde, dit beteken dat as mense hul rekenings vir water en ligte betaal, dit nie nodig sal wees dat belastingbetalers se geld verder verdeel moet word aan plaaslike regerings nie. Dit is tog immers die kern van plaaslike regering dat 'n munisipaliteit vir homself kan sorg.
Dit is egter 'n geval van ons stadsrade wat dink dat daar op nasionale vlak 'n onuitputbare bron van geld is. Ons kan maar geld mors; ons hoef nie ons agterstallige dienstegelde te in nie, want die nasionale regering sal voorsien. Drom is R77,3 miljard aan plaaslike regerings toegedeel.
Ek wil vandag vir u s dit is onbillik teenoor daardie belastingbetalers wat wel vir hul dienste betaal, want op die ou end is dit maar net weer hl belastinggeld wat van nasionale vlak na plaaslike regeringsvlak afgewentel word, waar hulle gesubsidieer word. Daar moet ernstig gekyk word na die plaaslike regeringsvlak. Soos die vorige spreker ges het, as bevoegde amptenare op plaaslike regeringsvlak aangestel word, sal dit al beter gaan, maar die houding is dat as die geld op is, dan word dit maar net weer van bo gevra.
In 2010-11 is slegs 71% op infrastruktuur gespandeer. Met ander woorde, die geld is daar, maar as gevolg van onbevoegdheid word dit nie gebruik om daardie noodsaaklike infrastruktuur op plaaslike regeringsvlak te vestig nie. Dit is dan geen wonder dat mense in die strate hardloop en betoog teen swak dienslewering nie. (Translation of Afrikaans speech follows.)
[Mr P J GROENEWALD: Hon Deputy Speaker, in terms of the Budget, R77,3 billion has been allocated to local authorities, but looking at the local authority level we see the outstanding debt for service charges now totalling more than R60 billion. In other words, this means that if only people would pay their water and electricity accounts it would not be necessary to further distribute taxpayer's money to local authorities. Surely, at the core of local authorities lies a municipality's ability to take care of itself.
However, it is a case of our town councils who imagine that there is a never-ending supply of money at national level. We can just waste the funds; we don't have to collect our outstanding service fees, because national government will provide. That is the reason why R77,3 billion had to be allocated to local authorities. I'm telling you today that this is unfair towards those taxpayers who do pay for their services, because, at the end of the day, it is once again their tax money that is simply being devolved from the national level to the level of local authorities, where they are being subsidised. The local authority level should be seriously investigated. As the previous speaker was saying, if competent officials could be appointed at local authority level, things would already improve, but for now the attitude remains that once the funds have been spent, more can simply be requested from upstairs.
In 2010-11 only 71% was spent on infrastructure. In other words, the money is there, but because of incompetence it is not being used to establish the necessary infrastructure at the local authority level. It is no wonder, therefore, that people are running through the streets protesting against poor service delivery.]
Deputy Speaker and hon members, thank you for the opportunity to address the House on behalf of the ANC. The 2012 Division of Revenue Bill, together with the state of the nation address, tells a true story of a country whose future is held in most capable hands, guided by heart and modelled by astute thought. Through the New Growth Path, the National Development Plan and Industrial Policy Development Plan, the ANC- led government has overcome what President Zuma refers to as "piecemeal planning".
The creation of decent work remains the principal intervention for addressing poverty and inequality. In addition, the New Growth Path proposed a new number of complementary interventions to address the structural challenges underpinning inequality. These include: ensuring more equitable access to education and skills development; accelerating rural development; supporting land reform designed to support a more productive and inclusive agricultural economy; optimising the job-creation potential of the green economy; and upgrading financial services for small enterprises and the social economy.
Since most employment creation occurs outside of the state, accelerating it requires the consistent use of core state functions to create an environment that encourages private enterprise and other nonstate organisations to expand jobs. These include ensuring that regulations of all kinds achieve their aims as efficiently as possible, infrastructure is of adequate quality and affordability, strong efforts are made to ensure more equitable and quality education, there are targeted and sustainable subsidies to kick-start new activities that can support large-scale employment creation, local procurement by the state stimulates demand, especially in the light of the instability in international markets; and there is targeted public support research development that unlock opportunities in the private sector. To this effect, the New Growth Path and Industrial Policy Action Plan 2 provide a framework for undertaking these tasks. As a developmental state, South Africa has a vision informed by a credible plan, and the Budget contained in the 2012 Division of Revenue Bill signifies a major step towards the successful realisation of such a vision. The 2012 Division of Revenue Bill heeds the constitutional requirements for an equitable division of nationally raised revenue among the national, provincial and local spheres of government. Added to this equitable division of revenue is a range of conditional grants made available to the provincial and local spheres of government to achieve specific outcomes.
In respect of economic growth, the 2012 framework for the division of revenue takes due cognisance of the special importance of economic growth as the heartbeat of the economy of South Africa. In his state of the nation address, President Jacob Zuma placed on record that this year, and in the coming years, we have taken the decision that we should do more to grow the country's economy, in order to get rid of the problem of unemployment, poverty and inequality. The plans set in the 2012 division of revenue cannot be read outside of the broader plan to grow South Africa's economy, thereby arresting the unfortunate scourge of unemployment, poverty and inequality.
The Minister of Finance announced a total of 43 major infrastructure projects, adding up to R3,2 trillion in expenditure. Accordingly, infrastructure plans amount to R845 billion, of which R300 billion is allocated to the energy sector and R262 billion to transport and logistics projects. According to the Minister of Transport, hon Ndebele, the build programme alone will help sustain between 50 000 and 100 000 jobs in the construction sector. We welcome the R33 billion allocated to local government for infrastructure grants.
The massive infrastructure investment programme will serve as an economic stimulus against the potential effects of the global economic stress. Because of this infrastructure investment, the rich and the poor alike are assured that their future is positioned against any potential pitfalls of the ongoing global economic uncertainty posed by global events. The massive infrastructure programme will span over 20 years and will enhance the growth and job-creation potential of South Africa's economic sustainability.
Land reform is an integral part of rural development, hence the Department of Rural Development and Land Reform's policies and programmes are critical to the very existence and survival of many households in South Africa. This is a sector with high job-creation potential and, as such, is a critical avenue for poverty alleviation. A positive impact has been made in creating jobs and work opportunities through the implementation of different initiatives in rural areas. It is the youth that has benefited the most in terms of skills development programmes and jobs created. A total of 7 398 youth were enrolled in 2010, with a further 5 000 to be enrolled in 2011- 12, and 10 000 during 2012-13.
The ongoing land reform process should be seen as a golden opportunity where we, as South Africans, can put our differences to rest and focus on building a social compact for the benefit of future generations. The President could not have put it better than when he made the appeal, "the land question is one of the most emotive issues in our history and present and must be handled with utmost care". Agriculture is at the centre of food security, job creation and poverty alleviation. It is in this context that we welcome the following allocations: a total of R18,1 billion, which includes an additional R1,9 billion for the Department of Agriculture, Forestry and Fisheries, as well as an additional R995 million given to the Department of Agriculture, Forestry and Fisheries for the Comprehensive Agricultural Support Programme, which will continue to support newly established and emerging farmers.
Lastly, we are of the view that the R150 million made available for provincial and municipal agricultural colleges will greatly provide for and improve skills that will benefit the sector. In closing, I would like to emphasise that we welcome this Budget. A lot of work has been done up to this point. However, the collective will and effective implementation of the Budget by officials to ensure that our policy changes the lives of people is critical. So too is our relentless pursuit of effective oversight of the executive, in partnership with the executive, to create a better life for all. As former President Nelson Mandela said, a budget is not just about numbers but about people. The ANC supports the Division of Revenue Bill. [Applause.]
Deputy Speaker, Deputy President, this year saw National Treasury intervening in a number of provinces to address financial mismanagement, which seriously undermined service delivery. While the ACDP fully supports these interventions, particularly in Limpopo, the question that arises is how these provinces were allowed to reach these shocking levels of mismanagement. Deputy Minister, were there no early warning signals and what lessons have been learnt from these interventions? For example, how does one deal with persistent overspending on personnel, which reduces funds available for infrastructure and service delivery? Surely rules should be in place to prevent appointments being made without proper budgeting. Clearly, financial management in provinces must be considerably improved, with the best persons available being employed as managers regardless of their political party affiliation.
The ACDP also shares the concerns about municipalities and provinces not being able to spend their capital budgets. While we appreciate that the National Treasury will continue to build capacity with the Infrastructure Delivery Improvement Programme, clearly much more needs to be done in this regard. We note that municipalities, which are meant to generate their own working capital from rates and levies, are acquiring a bigger share of national revenue - R77 billion, which is well up from last year's R68 billion. Financial management at municipal levels must similarly be addressed because this is where basic service delivery occurs.
In this regard, Deputy Minister, what progress is being made to establish internal audits at municipalities? In our view, it appears highly unlikely that all municipalities will reach the target of unqualified audits by 2014. It is also apparent that long-term remedial action is required across the board to improve financial management and address wayward spending patterns.
In conclusion, however, the ACDP wishes to commend the Minister and National Treasury for the initiatives already in place to begin addressing the concerns we have raised. Therefore we will support the Division of Revenue Bill. [Applause.]
Deputy Speaker and hon members, the UCDP welcomes the additional resources allocated to provinces for, inter alia, public sector wage agreements, infrastructure repairs - particularly the 10 priority roads in the North West - the extension of coverage of HIV and Aids treatment and an increase in access to Grade R education. These are indeed in line with what has been identified as key priorities and therefore it appears that national government is putting its money where its mouth is.
We recognise and acknowledge that counting among the development and service delivery impediments in local government is the fact that rural municipalities raise significantly less revenue than larger urban and metro municipalities, while they cater for large populations with collapsed infrastructure. We need to see this recognition expressed in the manner in which revenue and resources are allocated. The aim to boost the economic and social development of provinces and municipalities must be evidenced by the revenue allocations. Further, provinces must be mandated to prioritise and spend larger chunks of their revenue on rural municipalities.
We know that government has raised debt in order to protect the budget baselines and to keep the debt burden manageable, hence provinces are asked to review their budgets. There are two issues that need to be answered in this regard. The first is the long-term event of increasing debt and the second issue is that of ensuring that as the provinces and the departments rigorously review their budgets, they do not perpetuate the phenomenon of funds being returned to the Treasury at the end of the financial year. The UCDP supports the Division of Revenue Bill. [Time expired.] [Applause.]
Madam Deputy Speaker, the MF welcomes the allocation directed to infrastructure but notes that it is evident that municipalities are struggling in terms of spending their capital budgets for implementing their capital projects. It is important to give priority to and put more effort into capacity building because infrastructure is implemented mainly at local levels. Can you imagine directing monies towards municipalities without capacity? This will result in low spending affecting service delivery, widening the gaps for fraud and corruption and ultimately resulting in monies being returned to National Treasury.
The MF is concerned about the functional role of the Municipal Infrastructure Support Agency, the Development Bank of Southern Africa, DBSA, and the Department of Co-operative Governance and Traditional Affairs. How is the structure functioning and helping municipalities? We are concerned about the lifespan of the National Health Insurance pilot projects and whether the budget is enough for implementation, taking into account the crucial concerns of the NHI.
The failure of the Eastern Cape Department of education to spend the schools backlog infrastructure grant, in view of the fact that the allocation has been increased, is of concern to the MF. KwaZulu-Natal also has a number of remote areas and in reality we also have mud schools but no budget has been allocated for those mud schools. The MF is concerned because we know the backlog for school infrastructure in KwaZulu-Natal is a tremendous challenge. The MF will support the Bill. [Applause.]
Deputy Speaker, hon members, Azapo supports the Division of Revenue Bill. We do so hoping that the money will be used for what it is intended. Azapo supports the Bill also hoping there will be no instances of underspending by provinces. Azapo urges this House to look again at a policy that says money not spent shall be returned to the Treasury. Every time money is returned, the biggest losers are ordinary people who had nothing to do with the underspending and whose only sin is that they have inefficient officials. Is there not a way in which government could deal with the officials and politicians responsible without harming the very people it is trying to assist? As we said, Azapo supports the Bill. [Applause.]
Deputy Speaker, members, Ministers and Deputy Ministers, we are gathered here today to support the division of nationally raised revenue between the three spheres of government, as required by our Constitution. How many times have we heard people refer to skills, infrastructure and employment - and all these can only happen through the proper allocation of resources and accountability. Haircuts by Cabinet and the reprioritisation of programmes in the departments played a major role in what we are able to decide on in this division of revenue today.
Chapter 2 of the Constitution of South Africa states:
Everyone has the right to a basic education, including adult basic education; and to further education ...
The Constitution is based on the Freedom Charter of 1955, which states:
There shall be equal status in the bodies of the state, in the courts and in the schools for all national groups and races.
The people demanded compulsory and free education.
The ANC-led government knows that poverty, unemployment and inequality can be fought through education. As one of the priority needs of government, the Department of Education received the largest portion in the budget, that of R207,3 billion from 2012 through out the MTEF, to R236,1 billion.
The Department of Basic Education received R11,3 billion for five conditional grants, which are: Dinaledi Schools Conditional Grant; HIV and Aids Conditional Grant; National School Nutrition Programme, NSNP; Technical Secondary Schools Recapitalisation Conditional Grant; and Education Infrastructure Conditional Grant. There is also R2,3 billion for the School Infrastructure Backlog Grant, which is Schedule 7.
The equitable share of provinces has been increased over the medium term to address no-fees schools' subsidies, increasing access to Grade R and also extending assessment to Grade 9 learners.
The National School Nutrition Programme is a very good initiative, which was started in this department to address poverty alleviation in quintiles 1 to 3 schools. Through this programme children are certain to get a nutritious meal and can concentrate in class as a result. However, it becomes a real concern when children are not fed because of the lack of proper equipment, lack of monitoring and noncompliance.
During the hearing with the Department of Basic Education, the Portfolio Committee on Basic Education was given a report on the 2010 backlog grant for 49 mud schools in the Eastern Cape, which was approved in October during the medium-term adjustments. They also presented us with the 2012 activity chart for the 50 schools still to be built in the Eastern Cape. The total amount on the school infrastructure backlog grant for 2012-13 is R2,3 billion, within which there is R1,5 billion for the 50 Eastern Cape schools I already mentioned.
The Portfolio Committee on Basic Education attended the hearing. We were happy because together with them we will be able to ensure value for money and accountability during the process of building these schools in all the provinces, especially in the Eastern Cape. It was gratifying to know that the 49 mud schools are already in the process of being improved and will be operational very soon.
The technical secondary schools' recapitalisation grant for the 200 technical schools is welcomed because it contributes to skills development. It is very important that students should know the importance of technical schools at the secondary level, so that they are able to make career choices at that level, because the country cannot afford to import skills that can be obtained locally.
After matric, further education and training colleges, are another option for tertiary education. As a result, there is a higher education grant, which will successfully ensure that FET college functions are transferred to the Department of Higher Education. They are established to provide a wide range of learning programmes that address the skills shortages facing the country.
Transformation is a process. The Department of Basic Education should produce learners who qualify for higher education in order to address the economic needs of the country. This has been a tough road for the Department of Basic Education. It started by redressing the worst disparities in education created by the apartheid system. All the different departments of education had to become one, with one curriculum. Educational facilities and other tools of the trade in black schools, both in urban and rural areas, had to be established and funded within the available resources. Different models of education had to be tried and reviewed and decisions had to be changed. Consultations had to be made in order to get the right model. There are still problems but there is also progress. It can be said, as we stand here, that we can now see the light. We see the light at the end of the tunnel. We see the differences that are taking place, brought about by our hon members in the Department of Education.
The Ministers are working very hard to address all the problems - this is evident. The Department of Health received R25,7 billion, allocated to seven conditional grants. On maintenance, the department, under the leadership of the Minister, commissioned a team to audit all 4 200 facilities, clinics and hospitals to report on everything that forms part of the daily operations of hospital institutions. Findings on 337 facilities were completed and reported problems in all aspects of hospital maintenance, starting from repairs and ending in every type of infrastructure - broken toilets and all. This was a brave effort taken by the Ministry of Health. As a result, there is a grant to address this.
Another brave effort, which we see as activism, came when the Ministry commissioned an audit through the Development Bank of Southern Africa to visit all the hospitals to check the qualifications of hospital managers. This was brave because we know hospital managers are the key to the efficient and effective running of hospitals. This action will turn around the management of hospitals because qualified people will run them.
Allocations for the training of health professionals are also welcomed. An annual increase of medical students at medical schools has been confirmed. It is for the Department of Health and the Ministry of Higher Education to discuss how this is going to take place. We are aware that the Department of Higher Education has a grant that will look at the improvement of university infrastructure, including student accommodation, and we think all the medical schools will also be considered during this progress.
The National Health Insurance grant will be used for selected pilot projects at the districts. This is an issue that needs serious attention and as a result more detail will be given in the Green Paper. The enactment of the National Health Act is also welcomed.
Section 13 of the Bill was also mentioned by the Department of Health, as they feel this will assist them in achieving their goals because officials will have to report on the processes that are applied with regard to projects. National Treasury will provide the format, which will link National Treasury and the department, including Members of Parliament. We will be able to do our oversight because we will be working with facts.
I would like to refer the House to what hon Grant Snell said, based on the fact that there were problems between the money transferred to the provinces and the priorities not linking up. There is this issue that provinces' equitable share is crafted into a provincial budget in the form of an appropriation. Adversely, there are a number of co-ordinator structures established at the national level to facilitate the alignment of national budget to achieve national priorities. Consequently, due to these different priorities, the budget does not achieve what it was intended for. We need to address this issue because delivery is compromised and the state does not know which one exactly is the priority when these two spheres of government are involved. We need that to get attention.
Jobs will be created. Let us support the Minister of Finance when he says that: "We have a shared responsibility to prevent corruption."
It is our duty as Members of Parliament to do our oversight and get accountability. The ANC supports the Division of Revenue Bill. [Time expired.] [Applause.]
Deputy Speaker, let me start by thanking members for the support they have given to the Division of Revenue Bill before us today. Members have drawn our attention to the fact that this is a legislative requirement in terms of the Constitution, in terms of the Money Bills Amendment Procedure and Related Matters Act and also in terms of the Intergovernmental Fiscal Relations Act.
Most of the clauses in the annual Division of Revenue Bill of this year remain unchanged, with just three policy changes effected. The first is the inclusion of specific anticorruption conditions, which is the new section 13 in the Bill. This places additional responsibilities on the heads of provincial departments with infrastructure conditional grants. The second is the inclusion of a new subsection to provide Parliament with two weeks to comment on any proposed change to the frameworks of conditional grants prior to the Minister gazetting those changes. The chairperson of the committee, the hon Sogoni, referred to this. The third is the reconfiguring of the expanded public works grants due to the slow uptake. In-year calculations of the incentives' end have now been removed, hence there is no longer a need for a schedule to provide for this eventuality.
Different members in the committee raised a number of issues even though they supported the Bill. Among those is the hon Swart from the DA, who first bemoaned the growth rate not being enough and said the DA's alternative budget would address this; and that there is inefficient public service, corruption and misconduct, and nonpayment of the suppliers. I am glad he also responded to his concerns by saying he supported the ANC policy documents released. I want to invite him to attend our policy conference in June, because his party will not be releasing any documents any time soon, except the shadow documents he has tabled.
He also alluded to the capacity in the three spheres to spend and that there is underspending. This was echoed by the hon Ramatlakane and also the hon Singh. There are a number of capacity-building initiatives in place at national level to support provinces and municipalities and perhaps from the National Treasury's side I should draw these to the attention of members. One of the members, the hon Swart from the ACDP, actually alluded to our Infrastructure Development Improvement Programme. This provides technical and advisory support for capital expenditure planning and other technical advice, and support for all nine provinces. This programme also promotes best practice in infrastructure roll-out for the full lifecycle of infrastructure projects, which includes putting in place user asset management plans.
There is also the financial management grant, which promotes and supports reform in financial management and builds capacity in municipalities to implement the Local Government: Municipal Finance Management Act, Act No 56 of 2003, including, through funding, interns in municipalities to boost capacity. The third is the infrastructure skills development grant, which supports municipalities to create a long-term and sustainable pool of young professionals with technical and operational skills through deploying graduate engineers and scientists in municipalities.
The hon Bhoola has demonstrated his nonattendance at committee meetings, because all of these have already been tabled at the committee level. He must take it upon himself to attend committee meetings so that he can apprise himself of these developments. The hon Ntapane also raised the issue of capacity and the issue of revenue- raising, together with the hon Groenewald, who later submitted an apology that he was going to have to leave. He will read Hansard. I would like to indicate to him that as a responsible citizen and an elected representative in this House, he must also encourage people to pay their bills in their respective municipalities.
The hon Swart also alluded to the interventions that I have raised. The hon Ramatlakane also talked about the issue of spending in provinces. My thanks go to the hon Mashigo for responding that the alignment of provincial priorities with the national priorities is also a matter we assist with. She also raised the issue of the Gauteng provincial government. We are already in the process of assisting the department of health in Gauteng and we are beginning to reap the benefits of the support we are giving them.
The other matter that was raised was the issue of the eradication of mud schools. We have allocated a substantial amount to provinces to deal with that, including an amount of R159 million to KwaZulu-Natal for the 2012-13 financial year.
All in all, there was general support for this Division of Revenue Bill and I do not want to belabour this in this House. I want to take the opportunity to thank the committee for processing the Bill expeditiously and all the members who spoke for the support they have given the Bill.
Debate concluded.
Question put: That the Bill be read a second time. Bill read a second time.