Deputy Speaker, colleagues, again the tabling of the Adjustments Appropriation Bill affords Parliament and the people of South Africa the opportunity to reflect and build on the progress that has been made to change the lives of ordinary people, specifically the poorest of the poor. The Bill is tabled in the context of a devastating recession that led to a declining budget, when a number of firms had to close shop and thousands of workers lost their jobs.
The economic situation has resulted in the slowing down of economic growth and obviously reduced fiscal space. However, we take solace from the fact that the ANC-led government voluntarily maintained sound financial management and prudent fiscal financial choices that should caution us against the worst effects of the recession.
The national Adjustment Budget is tabled in line with section 12 of the Money Bills Amendment Procedure and Related Matters Act, Act 9 of 2009, and section 13 of the Public Finance Management Act, Act 1 of 1999. The Money Bills Amendment Procedure and Related Matters Act enjoins the Minister to present the Medium-Term Budget Policy Statement, MTBPS, and the Adjustment Appropriation Bill to a joint sitting of the finance committees of Parliament, which was done. I will not go into the rest of the procedures of the Act. It is safe to say that the committees held hearings with a few departments.
The first department to be worked with... in fact, I will just go through a few departments. My colleagues will cover the other departments. The Department of Public Works received, amongst others, R353 million, intended for the implementation of the devolution of the Local Government: Municipal Property Rates Act. The monies will be passed on to the provinces which will, in turn, allocate it to municipalities to evaluate all properties in their jurisdiction, so that they can finally charge levies or give exemption for certain properties that do not qualify. Members need to support this process in their constituencies, because communities resist, because they receive notices that do not explain the purpose of those notices.
The first challenge the department faces is the roll-out of the Re Kgabisa Tshwane project, which is supposed to be extended to other cities. The roll- over requested has been accepted by the committee, but the department needs to spend this money, as this roll-over is being approved for the second time. We propose that the Portfolio Committee on Public Works engages the department on their clear plans of spending these funds. Their second challenge is to address the capacity challenges in the department, to deliver on the expectations of their client departments, as their client departments seriously underspend in capital projects. We discovered that there are no service level agreements between the departments. Many departments underspend on capital expenditure, because the department lacks the necessary capacity.
The other department that was visited was the Department of Co-operative Governance and Traditional Affairs, which has also been allocated over R500 million to assist with provisional free basic services for the poor households. Despite major achievements since 1994, many communities and households still remain trapped in poverty. This should go a long way towards achieving a better life for all.
The department also applied, that is the Department of Co-operative Governance and Traditional Affairs, for a roll-over of R287 million of the Municipal Infrastructure Grant, MIG. We were informed that 33 municipalities underspent. However, the department wants to reallocate this money to 50 other municipalities that have capacity to spend. This is in contradiction with the Public Finance Management Act, Act 1 of 1999. Section 43(4)(a) of that Act says it "does not authorise the utilisation of a saving in (a) an amount specifically and exclusively appropriated for a purpose mentioned under a main vote". Clause 6.1.4(a) of the Treasury Regulations on roll-overs states that unspent funds on payments for capital assets may only be rolled over to finalise projects or assets acquisitions still in progress.
So, the objective of the MIG is to address backlogs with regard to infrastructure. In fact, we were informed by the official of the department that they want to redirect this money, as indicated, to these 50 municipalities. But the objective of MIG is to address backlogs with regard to infrastructure. Now, if you take this money away, it means that the poor communities of those municipalities will remain deprived of the necessary infrastructure development. In many cases, those officials do not understand the situation in different municipalities. At the end of the year, people get bonuses for not having delivered. Section 154(1) of the Constitution states - no, I am just ... it is all parties - and I quote, "The national and provincial governments, by legislative and other measures, must support and strengthen the capacity of municipalities to manage their own affairs, to exercise their powers and to perform their functions". Section 34(1) of the Local Government: Municipal Finance Management Act, Act 56 of 2003, states that, "the national and provincial governments must by agreement assist municipalities for efficient, effective and transparent financial management". So, the Department of Co- perative Governance and Traditional Affairs must co-ordinate provincial and local departments and Treasury, to establish support committees for municipalities. The 50 well-spending municipalities should actually be assisted to access the Expanded Public Works Programme incentive scheme.
We also met with the Department of Rural Development and Land Reform, which informed us that they are unable to accelerate land restitution, as they have run out of funds. At the end of the second quarter, they were at 91%. I think the Minister indicated that in the House one day. Treasury has not made any adjustments towards land restitution. It is difficult to understand why. The biggest challenge of this department is the price they have to pay for land, which is three times the market value. So, clearly, the willing-buyer and willing-seller approach does not work. In fact, the department refers to this willing buyer and willing seller approach as a willing buyer and unwilling seller approach. So, the alternative for government is the legal expropriation route. The ANC's Polokwane resolution says, amongst others, "where necessary, expropriate property in the public interest or for public purpose in accordance with the Constitution to achieve equity, redress, social justice and sustainable development. All legislation pertaining to expropriation must be aligned with the Constitution". So, we are not talking about wholesale expropriation. We are talking about expropriation in line with the Constitution. [Interjections.] Yes! [Laughter.]
Also, the request by the Department of Home Affairs for a roll-over of R150 million, to acquire the advanced passenger processing system, and also the "Who am I Online" project, should be granted, as these programmes are necessary for both the 2010 Fifa Soccer World Cup and the smartcard identity documents. However, the Department of Home Affairs need to move fast in resolving the tender issues associated with these projects. During the hearings of the first quarterly reports, the department indicated to the committee that they would like to take over the responsibility of this tender from the State Information Technology Agency, Sita. The committee agreed with that. The process needs to be fast-tracked as the 2010 Fifa Soccer World Cup is just around the corner.
I would like to take this opportunity to again thank the members of the committee and the staff, for the long hours they spent in compiling their reports. So, the African National Congress supports the Adjustments Appropriation Bill. I thank you. [Applause.]