Hon Chairperson, hon Minister, our committee chairperson, members of the National Treasury, as well as my comrades and distinguished guests who are present, as we are all aware, the annual process of dealing with Budget Votes is a time when accountability is demanded and expected. In the tabling of Budget Votes, we seek to ensure that the votes that are being appropriated do, in fact, speak to the policy priorities and imperatives of the governing party.
In our consideration of the Budget Vote of the National Treasury we are unavoidably called upon to reflect on a wide array of subjects and perspectives. Our central question is: What sense are we to make of the complex interplay between more rapid economic growth and the challenges of eradicating poverty and creating jobs and decent work?
The political context in which the Budget Vote is delivered is necessary as a background. This vote of funds needs to provide an understanding of how the National Treasury is reversing past imbalances and creating a better life for all, using its vote of funds. However, the National Treasury is unique in that it also has the responsibility of the management of funds within the legislative and policy framework of government. The critical question at the completion of today's debate will be: Has this particular Vote given effect to what has been politically agreed to by the executive within the context of the mandate of the National Treasury?
This Vote, far from being an administrative one, is both a political and financial instrument to finance the government's programmes in the financial sector, among others. Therefore it should reflect outcome-centred public spending. This Vote must be measured against ANC policy and priorities. We are the governing party. Legislation, like budgets, reflects policy and this Budget Vote should likewise reflect this.
Allow me to pay attention firstly to the special pensions dispensation and secondly to the Financial Services Board, as catered for in Programme 7 of our National Treasury. The fight for a democratic South Africa led to many people sacrificing their lives, livelihoods and families. The Special Pensions Act was enacted in 1996 in order to address the plight of those who had made these sacrifices and in the process lost the opportunity to provide for their livelihood while in the pursuit of freedom and a just society. The challenges that have arisen in the application of this Act led to amendments which were introduced in 2008. Notwithstanding all these amendments, huge challenges remained.
In 2008, amendments - as we are all aware - made provision for surviving spouses or orphans of pensioners to receive a monthly pension in addition to the lump-sum payment previously received. The amended Act further provides for a funeral benefit to be paid to the families of deceased pensioners. It is trusted that this Bill is going to enhance this purpose and honour the intent and spirit of the interim constitution, which led to the enactment of the Special Pensions Act.
In examining Programme 7 of this Vote, which deals with the contributions of civil and military pensions to funds and other benefits, we are drawn to the objective of what this Budget Vote provided for in the previous financial year and the current financial year, which is the elimination of the backlog in implementing the Special Pensions Amendment Act of 2008 by the end of the financial year, March 2012. The programme calls for ensuring that the administration only deals with applications that are not older than three months, or is currently developing a policy to deal with applicants younger than 35 years of age who applied before the amendment. This is done by sending them letters, or what is referred to as "application packs", requesting them to reapply.
While we definitely welcome the reconfiguration within the Department of Defence, which more emphatically and correctly established the Military Veterans department, the National Treasury must move with the necessary speed to ensure that Programme 7 of the Budget Vote is carried out within the stipulated time. We are dealing with a very sensitive area. The dislocation of so many of our combatants during the integration phase has left all of us with major obligations in ensuring that we do truly respect the sacrifice that the nonstatutory forces made in liberating our country.
Our approach to this situation must continue to show how we value and treat our veterans as those who were prepared to serve. People like Solomon Mahlangu, and many more, made the supreme sacrifice in pursuit of a better future for all. We are now more than a decade into our democratic dispensation. This assignment is long overdue, hence our clarion call: "Mazilunge izinto Zamakhomanda." [Let the matters of the commanders be addressed.]
I turn to another sensitive matter that falls under the jurisdiction of this Budget Vote: the Financial Services Board, FSB. This Budget Vote addresses the FSB, but if we are to agree to the Vote, then we need to be frank about the challenges that must be addressed. The National Treasury has not been a bystander in this matter and has certainly exerted its influence in reforms of the retirement industry.
The absence of a statutory retirement fund means that workers' income in retirement comes from occupational schemes or individual savings arrangements. The coverage of occupational funds in South Africa is high relative to other countries of similar income level but, while coverage varies across sectors, households generally do not save adequately for retirement. As a result many low-income workers rely only on the old-age grant.
A key reason for the disparity in the coverage levels and savings rates is the lack of preservation. Workers often liquidate their savings when they leave a job rather than transfer them to a new fund. The viability of mandating preservation upon a change of job or in the event of divorce becomes a necessity.
The unification of administration in the absence of a statutory retirement fund leaves many workers relying on the state's old-age grant. Transformation in the savings industry requires careful regulation. We welcome the proposed changes to Regulation 28 of the Pensions Fund Act, which imposes limits on where funds can be invested. Retirement savings must be invested in a prudent manner that protects fund members, while promoting economic development.
We need to conclude the long and outstanding discussion, which often saw organised labour express reservations to the Pensions Fund Act. Currently, it does not cover public sector funds. Discussions on this matter really do need to be driven to conclusion, because the result could enhance our developmental programme substantially.
When it comes to the FSB, we need to express our unhappiness and the need for deep-seated reform. We are unhappy about the question of surpluses. Historically, this has been raised by organised labour and again we are witnessing the FSB not implementing the basic instructions of the standing committee.
We are told that the rightful holders of these surpluses cannot be found, yet we have been at pains to point out how this can be done. We are told that insurance companies cannot trace relevant beneficiaries. As African families, we are interconnected and live in interconnected communities. I think the FSB would go a long way by taking advantage of this reality. Clearly it is within this context that we need to debate the Financial Services Board.
I posed the question at the beginning and indeed this budget gives effect to our developmental mandate. As the ANC, we support Budget Vote No 10 on National Treasury (Sars). [Applause.]