Deputy Minister, hon Thabang Makwetla, Cabinet colleagues and Deputy Ministers, chairperson and members of the Portfolio Committee on Defence and Military Veterans, co-chairpersons and
members of the Joint Standing Committee on Defence, hon members, senior leadership of the Defence establishment led by the Chief of South African Defence Force, SANDF, distinguished guests, friends and fellow South Africans, it is an honour to present the Budget Vote 19 on this first sitting of the Sixth Parliament following the recent national elections.
I congratulate Deputy Minister, Thabang Makwetla, on his return to this portfolio. I am confident together we will make a formidable team leading our Ministry of Defence and Military Veterans. I also extend a word of welcome to the newly established portfolio committee and its hon chair, Comrade Cyril Xaba.
It is with deep sadness that we report, and I hope that this House will mourn with us, as Defence and within the ranks of the SANDF, the passing of military veteran, Ike Maphoto, one of our stalwarts and the veteran of uMkhonto weSizwe.
I welcome students from Siviwe Special School in Gugulethu present with us here this morning, I think they are somewhere in
the gallery. This school has been adopted by the SA Navy. This is a special school. Please stand up so that people can see you. [Applause.] Thank you, thank you for coming.
Hose Chairperson, ours is a vast portfolio, being the sole establishment with a constitutional mandate for the defence of our country's national sovereignty and territorial integrity. In presenting the 2019 budget of the entire Defence portfolio, we hope we shall raise the confidence of the South African public. Its support is sought to enable us to fully execute our mandate. Further, we are appearing before this House in the confines of a severely constrained national fiscus, which has had a devastating impact on the conduct of our business and the fulfilment of our obligations.
Our presentation will give you a bird's eye view into the Defence portfolio and community of the military veterans, as well as what plans are in place and being executed to ensure the social wellbeing of military veterans, as well as the attendant challenges.
House Chairperson, this morning we recall that section 85(1) and section 85(2) of the Constitution vests the executive authority of the Republic in the President and which is exercised together with other Cabinet members. Section 92(1) of the Constitution holds us responsible for the powers and functions as may be assigned by the President, and in subsection (2) the Constitution further holds us accountable to Parliament for the exercise of powers and the performance of functions.
Further, section 202(2) of the Constitution provides that command of the Defence Force must be exercised in accordance with the directions of the Cabinet member responsible for Defence, under the authority of the President.
House Chair, it is thus pertinent to note that this Defence budget speech today is consistent with my constitutional duty to provide strategic direction to the entire Defence function. And it is their moral and legal obligation to execute my strategic direction in the year that lies ahead.
It is vitally important to reflect on the fundamental contribution that Defence makes to the sovereignty of the Republic of South Africa and the authority of the state. I must remind the House of section 227(1)(a) of the Interim Constitution of 1993 which pronounces that one of the functions of the Defence Force is, and I quote: "for service in the defence of the Republic, for the protection of its sovereignty and territorial integrity".
Consequently, we have developed a long-term strategic view focused on specific threats to the sovereignty of South Africa and the authority of the State that I must bring to your attention. South Africa's borders are the physical manifestation of the country's national sovereignty. South Africa seeks to build safer communities, fight corruption and promote integrity through inter alia protecting the country's borders. We have continued our efforts to enhance the safeguarding of the land borders and airspace and preventing the flows of illicit goods and illegal immigration that compromise the Republic of South Africa's economy.
The National Security Strategy requires that 22 army sub-units and the support there to be deployed for border safeguarding, and I wish to restate that to date there has been insufficient funding to realise this. The challenge in the maritime environment is crime, illegal exploitation of maritime resources, piracy and the uncontrolled movement of people and goods at sea.
With more than 90% of its international economic activity being reliant on maritime trade, the protection of these routes for commercial shipping is of vital national interest to the nation and an international responsibility.
During the February 2019 state of the nation address, the President indicated that we will continue to advance peace on the continent and across the globe, taking forward Nelson Mandela's vision of a peaceful, stable and just world. In these circumstances we strive towards sustaining long-range maritime and air patrols in the Mozambique Channel and to expand such patrols to the West Coast.
South Africa seeks to promote greater peace, security and stability in the region and elsewhere on the continent in the fulfilment of Madiba's vision. The Defence Force makes a vital and unique contribution to these diplomatic efforts. Today, South Africa remains a significant contributor to peace keeping operations on the continent and we continue to have a significant presence in the Democratic Republic of Congo through MONUSCO and the Force Intervention Brigade, FIB.
Our battalion within the FIB was commanded by a female, Lieutenant Colonel Tiisetso Sekgobela, who is here with us this morning. Please stand. [Applause.] She led our soldiers successfully through a number of battles. Additionally, Lieutenant Dimakatso Raisibe Maila, stand please ... [Applause.] ...served as the only female Platoon Commander in the Force Intervention Brigade.
The other soldier who merits honourable mention in Parliament is Lieutenant Colonel Stefan King, stand up, for his display of remarkable courage under enemy fire, which earned him the United Nations Captain Mbaye Diagne Medal for "exceptional courage".
His actions and those of his crew, in this high-threat situation, is the hallmark of the valour and battle-skills that we strive for in our armed forces.
House Chairperson, we continue to conduct search and rescue, disaster relief and humanitarian operations across the home- front and in neighbouring countries when called upon. Of particular note has been our recent response to the regional disaster caused by Cyclone Idai as far afield as Mozambique and Malawi. Air assets and medical staff of the South African National Defence Force were deployed in a Disaster Relief Operation under Operation Chariot.
The Chaplain-General, as the spiritual leader of the SANDF, facilitated a team of religious leaders to Mozambique to assess the damage, offer spiritual and moral support and determine the mobilisation of support through the South African Council of Churches. I must say that this group was led by the Archbishop Makgoba and Mpumlwana. Let me remind the House that the SANDF has carried out these interventions without reimbursement.
The growing threat of terrorism and fundamentalism by extremist groups is looming large and is a clear and present danger on the continent. South Africa is not immune to this threat, which has increased over the last few years with groups continuing to have the ability to destabilise multiple countries at the same time. Like terrorism, cyber threats dominate the international security agenda with states pursuing measures to secure their sovereignty and monitoring these trends on an on going basis.
South Africa needs to adapt with the rapidly changing electronic environment through appropriate security measures. Organised and violent crimes threaten and challenge the sovereignty, integrity and authority of the state, as well as the development and social cohesion of society in general. This cannot be allowed to persist.
House Chairperson and hon members, it is important for government to ensure that all South Africans are and feel safe at all times in their homes, streets and work places. The Commander-in-chief has ordered the SANDF to deploy in co- operation with the South African Police Service, Saps, in the
Western Cape province to combat crime and stabilise the security situation through intelligence-led operations. The ongoing intelligence assessment will then determine the right time for the withdrawal of the SANDF.
We welcome the commitment by the President to the establishment of a National Security Council as was announced in February 2019. This will ensure that we all make a significant contribution by co-ordinating and integrating our national responses to pertinent threats and emergent crises.
Our department will continue to support the broader economic and developmental initiatives of the sixth administration. Defence will continue to strive to support the Defence industry as a discrete sector of the economy, through meaningful participation in the President's Public- Private Growth Initiative, which seeks to harness the potential of the private sector in contributing to renewal, investment and growth in the country.
The resolving of uncertainty around Denel, and the impact thereof on smaller but critical industry players who hold
sovereign technologies, continues to be an issue of huge importance for Defence Force. These smaller, but very strategic, members of the industry supply chain are under extreme pressure in their efforts to survive. Many are poised to exit the Defence industry if there is no immediate and urgent intervention. Furthermore, uncertainty in the industry has led to many skilled engineers being recruited by Defence industry players outside of the Republic.
House Chairperson, as indicated in my speech in this House last year, we have launched the Defence Industry Charter. We have taken the deliberate decision to focus the Defence spend on capital projects domestically and continually seek "spin-off" technology benefits from Defence to the mainstream economy of South Africa.
To this end, we are also working with the Defence industry to develop a Defence industry business plan from 2019 - 2024. This business plan seeks to add jobs to the economy, grow export earnings and attract foreign direct investment. A critical intervention hereto must be increased administrative efficiency
in the arms control system and the removal of cross-cutting inhibitors to doing business in all the economic sectors in South Africa.
Using the expertise vested in Armscor, we are developing models to optimise industry-value within a diminishing capital budget, with a particular emphasis on the development of win-win Department of Defence expenditure plans to ensure the survival of high-risk or high-value members of industry.
In advancing social transformation, youth, education and skills development, the department runs a number of youth programmes, such as the Young Falcons with a specific focus on inculcating patriotism and discipline, whilst also assisting other departments with youth development initiatives.
Furthermore, in recent times we have intervened to stabilise the crisis at the provincial hospital in Mahikeng where we rendered essential services through the deployment of health professionals; we have intervened to contain the raw sewerage spills into the Vaal River; we have deployed engineers to assist
the Ditsobotla Municipality in the North West with regards to sewage system failure; we have built bridges in those rural areas where there is an absence of infrastructure in isolated communities; and we have supported other institutions in fire fighting, mountain and maritime search and rescue operations. [Applause.]
Chairperson, Defence continues to contribute to poverty alleviation and economic growth. As example, in recent times we have supported operation Phakisa towards unlocking the Oceans Economy, in particular providing a secure environment for this accelerated economic growth initiative; we have expanded Project Koba-Tlala to pursue the defence decentralised procurement of goods and services at a local level to be a catalyst for small, medium and macro enterprises, SMMEs, development and job creation; we have supported the Department of Agriculture, Forestry and Fisheries in protecting South Africa's wildlife and marine resources; we have supported the National Parks Board in the protection of rhinos and other wildlife against criminal syndicates; and we have contracted Damen Shipyards to build inshore patrol vessels and SA Shipyards in Durban to build a new
hydrographic survey vessel in support of South Africa's international obligation to Safety of Life at Sea.[Applause.]
Over the last few years the Department of Defence has been forced to continuously adjust its plans downwards in response to the declining budget. The Defence Force is becoming progressively more unsustainable in terms of declining defence allocations and we have now reached the point where the Republic must decide on the kind of Defence Force it wants and what it can afford.
I must regrettably inform you that this situation has not changed and has, in fact, become increasingly worse. We are being forced to adopt a short- term view with an increasingly constrained value proposition to South Africa and its people. Strategically, we are now becoming forced to transition from being mandate-driven to being funding-driven. Defence can only perform to the extent that it is resourced and funded. The significant reduction in the defence allocation has resulted in an ever decreasing ability to execute ordered defence commitments.
Hon members, I must now ask the question whether or not the House is satisfied that the current resourcing of the Defence Force is consistent with the obligations placed on it by the Constitution.
Last year I reported a 2018 Medium Term Expenditure Framework, MTEF, baseline reduction of R18,2 billion. The letter of allocation for the 2020 MTEF further demands an additional R4,7 billion reduction, the majority of which lies in the compensation of employees. This reduction will directly impact on the training, equipment, sustainment, core capabilities and operational output of the Defence Force. The above amounts to a nominal R22,9 billion reduction in the defence allocation over a five-year period.
I am at pains to inform you that the above reductions may be potentially compounded by an even greater envisaged baseline reduction scenario for Defence of 5% for 2020, 6% for 2021 and 7% for 2022. This may equate to an additional reduction of R9,6 billion.
The projected shortfalls in the compensation of employees have the following implications: During the financial year, a shortfall of R2,9 billion can possibly be funded from the operating budget. Over the MTEF, if the scenarios are not factored in, then the shortfall increases to R4 billion, R4,5 billion and R5,5 billion respectively with no provisions in the operating budget to cover the shortfalls.
Chair, this House should be very concerned that the funding for defence capital equipment is greatly reduced from 2021 onwards. Despite the guidelines I gave during my budget speech last year, the rate of decline has accelerated beyond our ability to control and absorb these on going cuts.
In terms of audit qualifications, I have instructed the accounting officer and Chief of the SANDF to monitor the action plans developed by services and divisions and to curb recurring findings. These will be monitored by me on a continuous basis during my monthly interactions with the management of the department.
I am concerned about a matter involving a member related to the wearing of religious accoutrements ... I am not sure if I am pronouncing that word right ... together with official SANDF uniform. Against this background, I have requested the Chief of the SANDF to find an amicable solution at the earliest possible time and report to me.
The reserve force made an enormous contribution to the operational performance of the Defence Force during the last financial year by providing over 14 000 members for various tasks. In response to my directive in this House last year, we have developed a new reserve force service system that is now ready for implementation. A decision has been taken to hold a reserve force indaba in September 2019.
After a lengthy consultation process, I have signed into effect the name changes of the reserve force units in the South African Army. These names now reflect a healthy balance of the South African military heritage.
Chairperson, Armscor has worked tirelessly with other stakeholders to establish the Defence Sector Charter for those wanting to participate in an inclusive and transformed Defence industry, including military veterans and the youth. The Defence Industry Fund provides a financial solution to the challenges that most SMMEs face.
The primary focus of Armscor remains the delivery of complex acquisition and research and development expertise to the South African National Defence Force, including test, evaluation and quality assurance. Armscor ensures that young people, especially those from rural areas, are capacitated with science, engineering and technology opportunities to succeed and be enabled to meet the global demands of the Defence industry.
The Department of Military Veterans has embarked on reviewing legislation and efficacy in delivering effectively and efficiently to military veterans and their dependants. We have taken a decision to amend the Military Veterans Act to clarify the definition of a military veteran and to introduce regulations to address a means test.
The Deputy Minister of Defence will assist me in this area as he has the institutional memory. [Time expired.] House Chairperson, thank you very much. [Applause.]