Chairperson, this is not my maiden speech in the NCOP. I spoke here for the first time as a provincial leader from the Pretoria-Witwatersrand-Vereeniging region. I then spoke as the Premier of Gauteng. I have also spoken as a Minister in the NCOP before. I saw on the screens that we are required to take our fingerprints. Regrettably, I didn't do so. The last time I did that, I ended up on an island not far from here for a very long time!
Deputy Minister, Ms Z A Kota-Fredericks, on whose behalf I read this speech, chairperson of the select committee, hon Sibande, with whom we work very well, hon members, ladies and gentlemen, comrades and friends, the Human Settlements sector in South Africa remains one of the most challenging in the social and economic environment. This mirrors worldwide trends, as the population explosion continues to create an increasing demand within the property market for well-located land and housing.
This Human Settlements Budget Vote occurs in the following context: Firstly, the economic performance of the country as reflected by the gross domestic product growth rate is still around 3%, far from the 7% where we should have been by now as a country. Secondly, inflation, which affects the price of everything in the country, is at 6,3%, where we don't want it to be.
Thirdly, the essential building materials for housing construction have recorded price increases above inflation. Fourthly, in addition to the increased costs of building materials, the building industry was hit by increases in transportation costs and the price of labour. All these things add to the price of our product, which is housing.
Fifthly, the price of money itself, which we call the interest rate and is at 9%, is a burden on working people, particularly the poor. The working class is unable to access housing loans, mortgages and bonds. Sixthly, unacceptably high levels of unemployment still persist at 25%. A 25% unemployment level is a threat to loans and mortgages but also to those who don't have any access to homes. They have no jobs.
Furthermore, the construction sector, in which we are located, and the property market have shown a marginal improvement of 2,6% as a result of the 2010 World Cup. In the absence thereof, it is difficult to see the construction sector going forward but, of course, there are good stories around the Presidential Infrastructure Co-ordinating Commission, PICC. I will come to that because Human Settlements is part of that.
Last but not least is the government fiscus, from which the Human Settlements budget is drawn. This has grown by a mere 10% since last year, while the housing demand has grown exponentially. Members of the House, you all know that the Minister of Finance, Pravin Gordhan, made the following call in respect of belt tightening: "In harnessing all the resources at our disposal, we have to do more with less. We have to work smarter and harder." We agree with him.
Let us examine the period under review. In our 2011 budget speech we committed to turning the corner in respect of the following three priorities: one, accelerated delivery; two, improved co-ordination; and three, greater clarity on the severity of the problems confronting the country's residential drive. I am glad to record the following as progress made in respect of these three commitments.
In 2009, we committed to delivering over 200 000 housing opportunities per annum and in that year we achieved that target. In 2011, we spent 98% of our budget, which delivered close to 180 000 housing opportunities. You will understand why we were lower. It is because of the factors that I have indicated. The price of one house today has gone up while the budget remained more or less the same.
The provincial performance is as follows: Eastern Cape, 18 000 houses; Free State, 15 000; Gauteng, which is the biggest, 38 000; Limpopo, 15 000; Mpumalanga, more than 7 000; Northern Cape, 5 000; North West, 27 000; and Western Cape, 18 000. I also greet the two MECs who are here, the MEC from KwaZulu-Natal and the MEC from the Western Cape. As members of this House, they will speak later.
This decreased figure is the result of the above-mentioned factors - inflation, the increased price of building materials and the increased costs of transportation and labour experienced by the building industry.
In addition to these adverse factors, R2,2 billion was spent on the requisite infrastructure, geo-tech evaluations, feasibility studies and forward planning. This figure includes more than R400 million of the budget spent on the rectification of shoddy houses that predate the year 2002. With this amount we could have built 7 000 houses. We don't have time to waste on this rectification campaign. It is a waste of time and we are firmly putting measures in place to make sure that this is forestalled.
In the 2011 budget speech we acknowledged that government cannot do the task alone. We called upon the private sector, high-net-worth individuals and captains of industry to come forward and say, "I too can contribute". The response was a successful launch at the Johannesburg Stock Exchange in September 2011 of the campaign now known countrywide as "Each One Settle One". We stole the slogan from the young people of the past: Each One Teach One.
The department's turnaround strategy has now been completed. Congratulations to the director-general, Mr Thabane Zulu, and his team.
In line with decisions of Cabinet and processes of the department to align various legislative frameworks and interventions around human settlements, the following milestones have been achieved: Firstly, the Estate Agency Affairs Act has been transferred from the Department of Trade and Industry to Human Settlements. Secondly, the President has assented to the Sectional Titles Schemes Management Act and the Community Schemes Ombud Service Act. Thirdly, the Home Loan and Mortgage Disclosure Act, the HLAMDA, polices the banks on how to issue money. The setting up of the Office of Disclosure, in terms of the HLAMDA, has been completed with the appointment of Danny Jordaan as its chairman.
The Rental Housing Amendment Bill has recently gone through the National Assembly and is to be referred to this House. Progress on Outcome 8, which is the basis of the contract between me as Minister and the President, is going very, very well. In the period under review, priorities reflect significant advances in the upgrading of slums, access to basic services, accreditation of key municipalities and land acquisition for human settlements. These are the key points that are part of Outcome 8, the agreement between the President and me.
In the period under review we have created over 76 000 job opportunities. About 50 000 were direct jobs, while 5 000 were indirect and 22 000 were induced jobs.
In the same period, significant projects were delivered and no province remains untouched. I am happy to say this in this House. I am referring to the following: Lakehaven at eThekwini, a beautiful project in KwaZulu- Natal; the Brandfort Women's Build project in the Free State; Mazista at Swartruggens in the North West; Seshego at Polokwane in Limpopo - these are all major projects, which were also driven nationally; Klarinet at eMalahleni in Mpumalanga; the China Square project in Kimberley in the Northern Cape; the Jabulani Hostel redevelopment in Soweto, Gauteng - this was in response to a push from some members of the IFP, who kept on asking us to improve the hostels; the Joe Slovo densification project in Langa, Western Cape, which is monitored by the Constitutional Court and is a success, as was seen by members who visited last week; and Southernwood at Buffalo City in the Eastern Cape.
Regarding the rooting out of corruption and maladministration, the new focus in our current investigations is on low-cost housing construction contracts. In this regard, more than 50 housing projects, with a value of R4,2 billion, were identified. Over 40 investigations have been completed and 17 are ongoing.
Provinces are participating in the fight against corruption, with Limpopo taking the lead, incidentally, in respect of the following: 24 contractors have been blacklisted for shoddy workmanship and nondelivery. More than R1 million has already been recovered from that province and we still want more. These cases have also been referred to the Special Investigating Unit.
Regarding public servants in all three spheres of government who committed housing subsidy-related misconduct and fraud, more than 290 of our own people in these spheres have been arrested. Of these, 240 have been found guilty and over 220 are facing internal disciplinary action. We are unhappy to give you these figures. Our job is to be involved in human settlements and not to be policemen. We wish that this type of statistic didn't have to be reported in this House. We want to give you good statistics on housing, not on how we deal with malfeasance within our department. Nearly R30 million has been recovered from those who were involved in corrupt activities.
Ms Thami Mpotulo, former Chief Director of the National Sanitation Programme, was found guilty of dereliction of duty and summarily dismissed. The former CEO of the National Home Builders Registration Council, Sipho Mashinini, underwent disciplinary action and the presiding judge has recommended dismissal, which is now in the hands of the NHBRC board.
A former SAPS detective and top SIU investigator, who was supposed to investigate the NHBRC, ended up in a strange recruitment process within the NHBRC, where the investigator was being recruited by the investigated. She has been dismissed with immediate effect. She is also the subject of a criminal investigation by the SIU itself.
With reference to the Each One Settle One campaign that I referred to earlier, we have invited a number of people from the private sector to get involved. I am happy to say that Anglo Platinum, which is the country and the world's number-one platinum company, has committed itself and we opened some houses together. These are very beautiful houses for members of the National Union of Mineworkers, the National Union of Metalworkers of SA and the United Association of SA. This will involve 20 000 houses in both Limpopo and the North West. This was done by us and Anglo Platinum together. That is what we mean by private-sector involvement. We congratulate them on that.
Gold Fields, a company that I was very close to, and BHP Billiton have also shown interest, as well as other companies that came forward.
Although the response from JSE-listed companies was lukewarm, we anticipate that there will be other responses. There have been considerable responses from private individuals and smaller companies. Over 22% of enquiries and pledges to Each One Settle One were from individuals who wanted to build homes for their domestic workers, while 15% were from individuals who wished to offer technical expertise. Overall, we take this opportunity to compliment all those who have made pledges for recognising that government cannot shoulder the responsibility alone.
In addressing the entrenched system of apartheid infrastructure, I spoke about the PICC, of which Human Settlements is now a part. In that regard I want to say the following: The New Economic Growth Path has identified energy, transport, roads and communication, as well as human settlements as very important key areas of focus. This has been given a further boost by the President himself, who invited Human Settlements to take centre stage at the PICC. The reason for this is that it has now dawned on all of us in government that, after all, human settlement is the biggest infrastructural project that any country can have.
It stands to reason therefore that any planning or any similar attempt that does not recognise the negative effects of the apartheid system, which effectively was the use of infrastructure like roads, amenities, facilities and residential space to keep racial groups apart, is bound to fail because you will perpetuate apartheid by repeating its mistakes. This would be completely contrary to the vision of a nonracial society and against the philosophy of a developmental state. It is for that reason that where we live, stay and work must be associated with the requisite infrastructure. The decision to position Human Settlements as one of the key drivers of the PICC has made our work of co-ordinating integration with other departments, particularly those handling the bulk services, much easier.
Let us talk about sanitation. Sanitation, which provides the most basic protection to the privacy and dignity of citizens, is an internationalised programme through the UN Millennium Development Goals, as agreed to by all UN member states. South Africa is a member state and a signatory of the UN Millennium Development Goals. We, together with other nations of the world, have signed an accord on sanitation. Sanitation is now an internationalised question.
In Human Settlements we say that if sanitation has been internationalised, it cannot be left to the people of Makhaza and Moqhaka in our own country. We cannot localise what already is an international programme. For this reason, I am happy to say that Cabinet has agreed that sanitation now takes centre stage as a national strategic project. In the PICC, this programme has been elevated to a national priority. Incidentally, this is also one of the key recommendations of the task team led by Winnie Madikizela-Mandela, which will be made public within the next few weeks. I have now received the report from her.
With regard to crystallising the Human Settlements Vision 2030 and developing possible strategies, we have to ask ourselves certain questions. One of them is this: Has the time not perhaps arrived for us to use sizeable established contractors to build our homes? We are leaving our people to the designs of what we call the "shovel, wheelbarrow and bakkie brigades". I told the President that when we build huge power stations, harbours like Coega and huge transportation networks and roads, as we are going to do in the PICC, we employ big companies, accompanied by their empowerment players. Yet we leave the people who voted for us and brought us here to the devices of builders pushing wheelbarrows.
We have to ask ourselves why so much of our money still has to be spent on rectification. It is for this reason that we would like to have a paradigm shift so that we use big companies, accompanied by their empowerment players, to build houses. The debate on this idea is open.
We are discussing, side by side with the Department of Public Works, the approach of also having a government construction company. I know a motion was put here that this option should be looked at very carefully. The debate is open - we are ready to hear your views as well.
We are doing a lot in respect of capacity-building. In this regard, we have accredited municipalities. All the metros are accredited to receive money directly from the NA in order to build houses for us. A number of other municipalities that are not metros will get funds. There are implications for provinces as well, because money goes straight to the cities; to the municipalities. However, the approach of Human Settlements is to monitor that money, so that we can account to you.
With regard to access to housing finance, the department will continue to provide support and find better solutions to issues of affordability through social housing, affordable rental and the promotion of home ownership. The Finance Linked Individual Subsidy programme, which was announced by the President in his state of the nation address, is now in place for people who are earning up to R15 000. These are people who in the past found themselves in what is known as the gap market. They are the people who could not access subsidies because they were too rich but could not access bonds either because they were too poor. These are the people we are now locating. More than 2 million civil servants qualify for this type of finance.
Negotiations on the Home Ownership Mortgage Indemnity Guarantee Fund, to assist ordinary working people and those in the middle class outside of the gap market to obtain their own homes, will be concluded in October. We are amalgamating all three of our development finance institutions and Cabinet will finalise it on the basis of a memorandum that I will bring to it.
On asset creation, the Department of Human Settlements is a key player in the property market. A recent study found that of the 6 million registered residential properties in the deeds registry, a total of 1,44 million are government-subsidised houses. This means that government builds more than any entity in South Africa. With the budget you give us, we, as government, actually move in the property market in South Africa - more so than any private company. Government is the biggest builder in South Africa. Government is the biggest driver of the economy in terms of construction.
About 49% of registered, subsidised properties are located in the eight metropolitan cities of South Africa. Ekurhuleni, at 141 000, Cape Town, at 130 000, and the City of Johannesburg, at 130 000, have the highest concentration.
The value of a title deed is obvious and should not be underestimated. We want our people to play in and be part of the property market. We also want our people to be part of the financial market. If you have a house, it is an asset. It is a form of capital that allows people to be in the property market as well as the financial market. The stumbling block for many people is the title deed. So what is this Minister doing to ensure that people have title deeds? As Minmec we took a decision last week. We are committed to ensuring that we close all loopholes around title deeds this coming year, so that people can have their title deeds, which would entitle them to be players in the housing market.
What is least understood but is nevertheless a major contribution to asset formation for beneficiaries is this: Whenever government allocates a house to a person, it also allocates land. A total of 78 000 hectares has already been distributed to people because when you give them a house, you give them land. Land on which a house has been built will never come back to this government or anybody else. It belongs to the player; the owner. Therefore, the title deed is ever so important.
Let me now come to the budget itself. The budget for 2012-13 has increased from R22 billion to R25,2 billion. This is a 10% increase from the previous budget. The human settlements development grant for provinces, which provides funding for human settlements, has been allocated R15 billion. The urban settlements development grant, which allows for eight metropolitan municipalities to improve efficiency and achieve a co-ordinated approach to the building environment, has been allocated R7,4 billion. The Rural Household Infrastructure Programme has been allocated R868 million.
The Social Housing Regulatory Authority has been allocated R2,1 billion for the rental programme. The National Urban Reconstruction Agency and the Housing Development Agency have been allocated R100 million each to accelerate housing delivery.
In conclusion, in 2009, after having visited projects in the Eastern Cape, Gauteng and so on, as well as here in the Western Cape, we made commitments to rectify the shoddy houses in Sweetwater, to invest in infrastructure in Diepsloot and to fast-track the Joe Slovo project, which is on course to the tune of R400 million. When we complete the project, we will be inviting the Constitutional Court itself, under whose authority this project has been monitored so that it can hold the three spheres of government - ourselves, the Western Cape and the City of Cape Town - accountable, to benchmark how far we have gone in respecting the decisions of the Constitutional Court on behalf of ordinary people.
To conclude, I thank the select committee, led by the hon Sibande; the Human Settlements team from all nine provinces, under our hardworking MECs and their HODs; leaders of accredited municipalities; the DG and his team, whom I praised earlier; the boards and CEOs of our institutions; and the communities who are active citizens. Yes, they can participate in demonstrations from time to time, as long as they don't affect the rights of other people.
The National Planning Commission noted the following:
Transforming human settlements is a large and complex agenda, requiring far-reaching policy changes and shifts in household, business and institutional practices.
We concur. In spite of all the challenges, Human Settlements is gradually changing the residential landscape of our country in order to restore the dignity of the people.