Hon Speaker, hon members and esteemed guests, today marks the culmination of a process that was started by the Minister of Finance, when he tabled the Budget, that is, the Appropriation Bill [B3-2012].
The President set the broad principles of what the ANC-led government had to do to ensure that the five policy priorities of government were achieved. In other words, this Appropriation Bill gives effect to those priorities as identified in the ANC manifesto of 2009.
The ANC manifesto declared that:
These priorities will be tackled with all means at our disposal - the resources of government, the vision of the Freedom Charter, and the energy and commitment of our people. Our priorities will specifically target the needs of the youth, women, workers, the rural poor, the elderly and people with disabilities.
All these commitments find expression in this Appropriation Bill.
The Standing Committee on Appropriations invited the Public Service Commission, PSC, to advise as to whether the state had sufficient capacity to deliver on these responsibilities. The PSC informed the committee that, amongst others, in research conducted in 2009-10 they found that, while many departments were able to spend their budgets, there remained a gap between actual expenditure and performance on predetermined objectives. In other words, they found that, although the departments had spent their entire budget and some had received unqualified audits from the Auditor- General, the expenditure was not aligned to the annual performance plans or their measurable objectives.
Of the 13 departments that were sampled, the highest score achieved was 67%, while another department scored only 37%. This performance demands a close scrutiny of our in-year monitoring by Parliament.
The third quarter expenditure report will reveal that, although spending has improved, some departments had spent as little as 50% by the end of December, but were able to exhaust the budget three months later. That is called fiscal dumping, because, although the money had been spent, it did not achieve those predetermined objectives.
The PSC raised the failure by senior management to sign performance agreements and the lack of requisite skills. Their presentation concluded with the following observations.
Firstly, from the PSC's analysis, managerial shortcomings emerge as being a major factor. The analysis reveals that managers focus on processes and their associated emphasis on activities and outputs, while neglecting outcomes and impacts. As a consequence, programmes do not achieve their intended results.
Secondly, the lack of clear consequences for nonperformance contributes to a skewed incentive structure that has distorted downstream effects on overall public administration.
Therefore, the establishment of the Department of Performance Monitoring and Evaluation, and the subsequent directorates of monitoring and evaluation in various departments, should go a long way towards addressing these challenges.
The committee also invited the Human Sciences Research Council, HSRC, to comment on the alignment between the Budget and government's policy priorities. The HSRC viewed the Budget in a positive light with respect to broad principles, and mentioned the following.
Firstly, the Budget aims to shift investment from consumption to investments.
Secondly, the Budget reflects a commitment to bold infrastructure plans, serving the whole country through an integrated approach and speedy delivery.
Thirdly, the Budget provides increased support to the industrial policy action plan and the establishment of special economic zones.
Fourthly, the Budget invests in transport, resulting in the improved living standards of workers.
Fifthly, the Budget pays attention to rural development.
The HSRC appreciated the bold investment in education and the continual assessment of targeted grades. However, they highlighted the problem that our education system did not always result in the employment of black graduates, even those educated at the same universities as their white counterparts. Black graduates did not stand the same chances of employment as their white counterparts.
However, the investment in job creating programmes, amongst others the Expanded Public Works Programme, Working for Water, Working on Fire, the Community Works Programme, etc, were not always spent but redirected instead to other government activities. If we are to achieve the five million job opportunities over five years, Parliament must monitor the implementation of these programmes more closely.
The other important objective should be the constant review of the budgets of the new departments established in 2009. Some of these departments, for example the Department of Energy and the Department of Women, Children and People with Disabilities, have complained about their baseline budgets.
One of the achievements during this term of Parliament has been the introduction of the National Health Insurance, which will allow universal access to health care for everybody in the country.
The committee believes that the next Appropriation Bill will have to include a section that spells out clear plans for the infrastructure programmes to be introduced in the following financial year. This will avoid underspending and delays in the implementation of these programmes.
The ANC welcomes the undertaking by National Treasury in this Bill that Parliament's appropriation committees will be consulted when funds are shifted in terms of section 43(4)(b) and (c) of the Public Finance Management Act, Act 1 of 1999, as amended by Act 29 of 1999.
The ANC also welcomes the establishment of the multi agency working group on supply chain management, consisting of National Treasury, SA Revenue Service, and officials from the Financial Intelligence Centre.
We also applaud other measures that are taken to improve financial management and to root out corruption within the public sector, especially with respect to supply chain management.
In conclusion, in the state of the nation address, the President declared:
We will begin to write a new story about South Africa - the story of how, working together, we drove back unemployment and reduced economic inequality and poverty. I thank you. [Applause.]