Chairperson, I hope the reading of the riot act was not meant for me, but for other members of the House! [Laughter.]
Chair, hon members, MECs from different provinces - welcome here - invited guests, comrades and friends, ladies and gentlemen, the human settlements sector in South Africa remains one of the most challenging areas in the social and economic environment. This mirrors worldwide trends as population explosions continue to create an increasing demand within the property market for well-located housing.
This Human Settlements Budget Vote occurs within the following context: We are seeing negative economic performance well below the 7% target of the country and inflation at 6%. Essential building materials for housing construction have recorded price increases of above inflation. In addition to the increased prices of building materials, the building industry has been hit by increases in transportation costs and, in particular, labour inputs. The price of money, as reflected by interest rates, is around 9%. This is a burden on working people, particularly the poorest, who are unable to access housing loans, mortgages and bonds.
Unacceptably high levels of unemployment still persist at around 25%, particularly among young people, who constitute two thirds of this percentage. The construction sector, in which the housing property market is key, has shown marginal improvement of about 2,6%. Not least of all the government fiscus, from which the Human Settlements budget, which we are talking about today, is drawn, has grown by a mere 10% since the last financial year, while the housing demand has increased. In this light, the Minister of Finance Pravin Gordhan's call for belt tightening is instructive. He says: "In harnessing all the resources at our disposal, we have to do more with less. We have to work smarter and harder." At Human Settlements, we take this message to heart.
Let's deal with the period under review. In our 2011 budget speech we committed to turning the corner in respect of the following key strategic priorities: accelerated delivery; improved co-ordination; and greater clarity on the severity of the problems confronting the country's residential drive. The following progress has been made on these commitments: In 2009 we committed to delivering over 200 000 housing opportunities per annum and we achieved our target that year. In the ensuing years, we came to the realisation that human settlement was more than just the number of housing units on the ground and that there were other key critical drivers, including the acquisition of land and infrastructure development.
In 2011, we spent 98% of our budget, which delivered about 180 000 housing opportunities. This decreased figure is the result of the above-mentioned factors, including poor economic performance, inflation and increased building materials, labour and transportation costs. However, the situation could have been worse.
In addition to these adverse factors, funds have been spent on requisite infrastructure, geo-tech evaluations, feasibility studies and forward planning. Significantly, over R400 million of the budget - this is sad - was spent on the unnecessary rectification of 7 000 shoddy housing units that predated the year 2002. This money could otherwise have been used to build 7 000 more housing units with the budget of last year. Nevertheless, it is noteworthy that the houses that are being constructed are aesthetically superior, of a high standard and quality and of good design.
In the 2011 Budget Speech we acknowledged that government could not do it alone. Here, in the House, we appealed to the private sector, high-net- worth individuals and captains of industry to answer the call "I too can contribute". We translated this call into the "Each One Settle One" campaign. I will say more about that later.
The department's turnaround strategy is now complete. Congratulations to Director-General Thabane Zulu and his team for this success. [Applause.]
In line with the Cabinet's decision for all human settlements-related legislation to be located within Human Settlements, deliberations between the Minister of Trade and Industry, Rob Davies, and myself around the transfer of the Estate Agency Affairs Act from the DTI to the Department of Human Settlements has been concluded. [Applause.] We are happy to announce that the President has assented to this by signing the necessary proclamation. This will indeed fast-track our strategy to deracialise residential areas. At the right time, we will interact with the relevant industry players and all other stakeholders. What it means here is that I have to talk with the likes of Wendy Mechanik. [Laughter.]
In February 2011 we tabled before the House the Sectional Titles Schemes Management Act and the Community Schemes Ombud Service Act. Again, we are happy to announce that the President has assented to these Acts too. Accordingly, we will establish the office of the Ombud, which will handle dispute resolutions within bodies corporate within the common property environment.
In line with the Home Loans and Mortgage Disclosure Act, the setting up of the Office of Disclosure has now been completed with the appointment of Mr Danny Jordaan as its chairman. He brings with him a wealth of experience associated with the successful hosting of the 2010 Fifa World Cup, which was essentially about infrastructure construction. This office plays an important oversight role in promoting fair lending by financial institutions in the housing market. Exchanges have already taken place between the Banking Association of South Africa and the Independent Regulatory Board for Auditors.
Outcome 8, which is the contract between the President and me, has seen a lot of progress. The President and I have agreed that the Minister has to be evaluated on all the points of Outcome 8. The programme of improving the property market remains a major challenge. However, the progress mentioned above around the Estate Agency Affairs Act, the Finance-Linked Individual Subsidy Programme, or Flisp, and the Mortgage Default Insurance Fund will go a long way in addressing these challenges.
In the period under review, we have created over 76 000 job opportunities. Of these, about 50 000 were direct, 5 000 indirect and 22 000 induced.
The Rental Housing Amendment Bill, which introduces the internal appeal mechanism before a rental dispute can be referred to court for review, has recently gone through the House and the NCOP. Its enactment will help ease the financial burden of legal costs on tenants, the majority of whom are working people.
In the period under review, significant projects were delivered in all nine provinces - no province remains untouched. Lakehaven in KwaZulu-Natal; the Women's Build Project in Brandfort, Free State; Mazista in the North West; Seshego at Polokwane in Limpopo; Klarinet in Emalahleni, Mpumalanga; the China Square Project in the Northern Cape; and the recently launched Jabulani Hostel redevelopment - I said "redevelopment", not "upgrade" - in Soweto, which was launched by the Deputy President in the presence of members of the portfolio committee, are all major, nationally driven projects. The densification of Joe Slovo, where we were this morning, is progressing well under the authority of the Constitutional Court. Last, and by no means least, is Southernwood social housing in Buffalo City, Eastern Cape, which now makes the Eastern Cape the leader in the Human Settlements social housing programme. I am happy to say the MEC is here. [Applause.] Not everything from the Eastern Cape is bad - think of the section 100 education intervention! [Laughter.]
With the drive from the National Home Builders Registration Council, we piloted the building of houses using alternative technologies, including the use of recycled materials. You all saw the Athlone Power Station near here, where the cooling towers were blown up through the process of implosion. All that rubble was used to build very good houses in Blue Downs, Cape Town.
In contributing towards the development of Vision 2030 for Human Settlements, consultative forums with various stakeholders have taken place.
Let's talk about rooting out corruption. 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 to be studied. Over 40 investigations have been completed and 17 are ongoing. Provinces are participating in the fight against corruption, with Limpopo taking the lead. Not everything bad comes from Limpopo. [Applause.] Congratulations to the former HOD, who is now the MEC. Twenty- four contractors have been blacklisted for shoddy workmanship, and these cases and others have also been referred to the Special Investigations Unit, SIU. I want to identify the SIU as a special organ that is assisting us. They never tire in assisting us and making sure that we go after the people who abuse public funds.
Regarding public servants in all three spheres of government who committed housing subsidy-related misconduct and fraud, more than 290 people have been arrested, over 240 found guilty and over 220 are facing internal disciplinary action. I say these things with a heavy heart. My job as Minister is not to be a policeman, chasing people around, but you members ask me questions about these matters. You always say, "This is shoddy! Have investigations been done?" That's what we do.
Ms Thami Mpotulo, the former head and chief director of the National Sanitation Programme, was found guilty of dereliction of duty and improper conduct. She has been dismissed. Mr Sipho Mashinini, the suspended CEO of the National Home Builders Registration Council, NHBRC, was dismissed by Judge Myburgh of the Labour Court. Ms Vanessa Somiah, a former SAPS detective and top SIU investigator, who had been irregularly employed in the NHBRC by Mashinini, has had her questionable employment terminated by the board with immediate effect. [Applause.]
The objective of the "Each One Settle One" campaign I mentioned earlier is to mobilise the private sector to participate in housing provision towards the reduction of the backlog. We again congratulate Anglo Platinum, the leading platinum company in the world, for coming forward and committing itself to building 20 000 houses for their employees, both in the North West and Limpopo. We opened that beautiful project. [Applause.] Members of Anglo Platinum include the working class who are affiliated to the National Union of Mineworkers, National Union of Metalworkers of South Africa and United Association of South Africa.
It is pleasing to observe that the idea that people should live near their places of work and be assisted by their employers is taking shape. Gold Fields, which I know because I used to be a director, and BHP Billiton will soon be making an interesting announcement, together with us, in relation to "Each One Settle One".
To date, although responses from companies listed on the Johannesburg Stock Exchange have not been as forthcoming as initially anticipated, there have nevertheless been considerable responses from private individuals and smaller companies. Over 22% of enquiries and pledges to "Each One Settle One" are from individuals who want to build for their domestic workers and 15% from individuals who wish to offer technical expertise. Overall, we take this opportunity to compliment all those who have made pledges for recognising that government alone cannot shoulder the burden of providing housing. This is the essence of partnership.
Let's address the entrenched system of apartheid infrastructure. The New Growth Path has identified energy, transport, roads, water, communication and, indeed, housing as key areas in its strategy to fast-track sustainable growth, employment and equity creation. This was given a further boost by President Zuma's establishment of the Presidential Infrastructure Co- ordinating Commission, PIEC. This is a major breakthrough towards reversing the entrenched system of apartheid infrastructure and bad spatial planning. It therefore stands to reason that any planning that does not recognise the negative effects of the apartheid system, which effectively was the use of infrastructure, roads, amenities, facilities and residential space to keep racial groups apart, is bound to perpetuate apartheid spatial planning in our new democracy. This would be completely contrary to the vision of a nonracial society and against the philosophy of a developmental state.
The decision to position Human Settlements as one of the key drivers of the PICC has therefore made our work of co-ordinated integration with other departments, particularly those handling bulk infrastructure, much easier. Effectively, the introduction of the PICC by the President means that we are seeing the beginning of the end of government departments operating in silos.
Let's talk 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, MDGs, as agreed to by all member states of the UN. It therefore stands to reason that in our country, which is a signatory to the UN protocols related to the MDGs, sanitation cannot be less than a national strategic project. There is no logic in South Africa participating in the UN, where sanitation has been internationalised, only to end up localising it here in South Africa, in areas such as Moqhaka and Makhaza. It is therefore of critical importance for this programme to be elevated to a national strategic priority programme. In the PICC this programme has been elevated to a national priority. [Applause.] Incidentally, this was also one of the key recommendations of the task team led by Mrs Winnie Mandela, which will be made public within the next few weeks after this Budget Vote, because I now have the report.
When we are developing possible strategies, we have to ask ourselves certain questions. One of them is this: Has the time not come for us to use sizeable, established contractors to build our own homes? This question is posed because when large construction projects are carried out, like harbours and so on, we bring in large companies, with their Black Economic Empowerment partners. Yet when we build houses for the people who elected us, we leave them to the mercy of the shoddy workmanship of small builders who bring their wheelbarrows, bakkies and shovels. Many of these small builders actually discredit the campaign of empowering people.
We are busy with capacity-building and I shall not talk about that now because of all the time I have used. Let's talk about access to financing instead. The department will continue to support and find better solutions to issues of affordability through social housing, affordable rental and promoting home ownership. The President made a commitment during his state of the nation address regarding the Finance-Linked Individual Subsidy Programme, Flisp. We are satisfied that the banks have come on board and we are proud to say that Flisp has started. It is going to assist more that 2 million people, who are employees in government, to enter the housing market.
We are amalgamating our development finance institutions. The National Housing Finance Corporation, NURCHA and Rural Housing Loan Fund are being amalgamated into one financial institution. Cabinet is awaiting the relevant documentation to accredit this.
The budget for 2012 has been increased from R22 billion to R25,2 billion - a 10% increase. The Human Settlements Development Grant for provinces, which provides funding for development, has been increased and allocated R15,7 billion. The Urban Settlements Development Grant has been increased to R7,4 billion. The Rural Households Infrastructure Programme has been allocated R868,5 million, and that includes development around sanitation. The Social Housing Regulatory Authority has been allocated R2,1 billion for rental programmes. The National Urban Reconstruction and Housing Agency and the Housing Development Agency have been allocated R100 million each to accelerate housing delivery.
To conclude, in 2009, having visited the Eastern Cape, Gauteng and other places, I spent a night in Diepsloot to study how best we could ensure that fast-tracking occurs to take our people out of the misery of informal settlements. I visited and slept in the house of one lady, Ms Mashamaite. It wasn't a house, but a shack. I am happy to announce today that Ms Mashamaite of Diepsloot, who is here with us today, no longer has a shack, but a house. The House should know that. [Applause.] The message we are sending - and we shall keep on sending it to the many other citizens in other informal settlements beyond Diepsloot - is that no matter how long it takes, Human Settlements will touch your life, too!
Le mini iya kuze ifike nakuwe. Siyabulela. [Kwaqhwatywa.] [It will be your turn one day. We thank you. [Applause.]]