Chairperson of the NCOP, I'm very happy to speak in front of hon Doidge. There are a few MECs from different parts of the country; I recognise them. We are assured by Public Works that whatever shortage we have in respect of our budget, they will give us the lump sum. [Laughter.]
The presentation of the first-ever Department of Human Settlements Budget Vote, Vote 30, in this House is a significant milestone in the journey from housing to human settlement. It demonstrates the paradigm shift we are making as a national government, both in our thinking and in our actions.
We have refined the understanding of our mandate. We have begun to align our policies, plans and budgets. In this way, we shall achieve our human settlement mission: to provide decent shelter, the most basic need, for a better life for all our citizens. We shall highlight the three areas of human settlements delivery and intervention, which touch every South African.
Firstly, at the uppermost end of the housing market where people easily qualify for credit finance, our responsibility as a department, and as a Ministry, is to create an enabling environment through policies and legislation which protect consumers. This we do primarily through the Home Loan and Mortgage Disclosure Act, Act 63 of 2000. In terms of the Act, financial institutions are required to provide the Minister of Human Settlements with information in their annual financial statements on lending patterns. Such information has to be accurate, timeous and comprehensive to allow for its consolidation and analysis by the department. This enables us to assess the performance of these institutions in providing credit to all South Africans who qualify.
The Ministry will play an activist role in monitoring the banks' performance in this area, in the interests of regulating the homeowners' property market. In our recent meeting with all the major financial institutions of our country, we assured them of our commitment to strengthening our own disclosure office and, to the extent that Human Settlements are concerned, to examining and, where possible, to easing any onerous reporting procedures without diminishing their compliance in respect of the Act.
Secondly, as Human Settlements we have a role to play in assisting people who don't qualify for either bank credit or government Reconstruction and Development Programme, RDP, subsidies. This is the so-called "gap" market. We have heard their concerns. Consequently, the President, Jacob Zuma, announced in his state of the nation address the creation of a R1 billion guarantee fund aimed at providing support for people within this market. Those who stand to benefit from such a financial platform include inter alia nurses, teachers, police, prison wardens, government officials, certain categories of management and so on, including blue collar factory workers.
We have emphasised to financial institutions that in putting the floor under their operations in this gap market to mitigate risk, we do so mindful that the beneficiaries come first, and that prudence should remain paramount. In no way can there be recklessness in lending practices. Similarly, beneficiaries also are well advised to exercise responsibility by adhering to the terms and conditions under which credit is made available. To a certain extent, the NCOP has a responsibility to play a role in respect of bringing this knowledge to the attention of these sections of our people.
Our third area of responsibility in the delivery of human settlements relates to the bottommost end of the market known to all of you, where we provide housing subsidies to the poorest of the poor. This is a critical area, as the bulk of the housing backlog exists there and affects largely those who earn between R0 and R3 500 a month.
The total amount allocated to grants for the poor in our budget during this period is R15 billion, and it will escalate to R17 billion by the end of the period, which is 2014. A large percentage of this is allocated to provinces - I'm happy they are here while I'm speaking in their House - in the form of housing development grants. In addition, starting from this year, we have an allocation of R1,2 billion for the sanitation programme to deal with the rural infrastructure backlog. These endeavors, beyond providing shelter, contribute to economic growth and job creation whilst at the same time restoring human dignity. Our holistic approach recognises that the economic fortunes of South Africans are never static. Someone who lives in a shack in Gugulethu today may occupy an RDP house tomorrow in Delft or, later, may reside in a more comfortable place in Rondebosch.
As the Ministry, working within the government collective, we participated in developing a new outcomes-based approach to defining our targets and to measuring progress. The January 2010 extended Cabinet lekgotla tasked us with implementing what is known as Outcome 8, whose objective is "Sustainable human settlements and improved quality ... " not of life but, " ... of household life". Consequently, we have prioritised four areas of work between now and 2014. These are: accelerated delivery of housing opportunities, access to basic services, more efficient land utilisation, and an improved property market.
In the field of housing opportunities, the target is 220 000 housing units per year between now and 2014. Additionally, we are acquiring 6 250 hectares of well-located state land for human settlement development, and an enabling environment is being created for the provision of 600 000 new loans in the affordable housing sector. In addition, 500 000 informal settlement dwellings are being upgraded. We must emphasise that such upgrading does not detract from government's long-term objective of eradicating slums. The combined effect of this is that, by 2014, we will have made significant inroads in our mission of ensuring sustainable human settlements and an improved quality of household life.
A series of workshops have already been held with our provincial government colleagues to align provincial planning and expenditure to the targets set by the Cabinet lekgotla, and these will be ratified at Minister and MEC, Minmec, meetings later this month. In this regard, I am happy to announce that the President and I have signed a performance agreement that puts Outcome 8 into effect. I assured him of my readiness to fulfil this task.
Irrespective of what skeptics may say, the record of this government on housing delivery speaks for itself. Since 1994, more than 2,3 million housing units have been made available for nearly 11 million people. This work continues unabated and, as things stand today, we have more than 8 000 human settlement projects under way across the country, with preliminary figures translating this into the construction of 219 000 housing units in the past financial year.
At the same time, there is a need for realism as we go forward. We must be candid in this House, and with the nation at large. Despite all these commendable efforts, the housing backlog has grown by leaps and bounds from 1,5 million in 1994 to approximately 2,1 million. This means that approximately 12 million South Africans are still in need of better shelter. We have, therefore, hardly moved in just breaking the backlog, never mind the numbers associated with population growth.
As a reflection of the increased demand, the number of informal settlements has ballooned to more than 2 700 today. Our reality is that we are currently only able to clear the housing backlog at a rate of 10% per annum. With the current pace of delivery and the resources at our disposal, and mindful of continued economic and population growth rate and the rapid pace of urbanisation, it could take us decades merely to break the backlog. In real terms, as a country, we have hardly moved.
Ka Sesotho ba re, re fatela morao jwaleka kgoho. [We are not making any progress.]
Nevertheless, we can never turn our backs on the poor. It is not their fault, nor should poverty be used as a political tool.
The scale of the problem has already been brought to the attention of government colleagues in a presentation I referred to at the extended Cabinet lekgotla. Of significance are human settlement presentations made during the Presidential Co-ordinating Council, PCC, meeting in March where Ministries, as well as Premiers and members of the SA Local Government Association, Salga, were led in discussion on human settlements by the President.
In respect of human settlements, it was recognised that the current fiscal allocations are inadequate, with the potential unintended consequence that budget allocations do not match what we call the Human Settlements' mandate.
Also captured in discussion was the fact that, although budgets are important, our work also requires thorough co-ordination of government stakeholders in all three spheres, as well as with the private sector and civil society. Consequently, the President - and I'm happy to say this - has instructed that a special PCC meeting be held on 18 May to focus all the efforts of government and various other stakeholders on one item - and for the whole day, one item only - human settlements. The Presidency and the Ministry have already held several planning workshops in that regard.
Questions are being asked about what will continue to propel South Africa, its economy and life in general beyond the current infrastructural developments which are associated with the 2010 Fifa World Cup. Undoubtedly, the World Cup will be a resounding success. I say so as a member of the local organising committee, LOC, and Fifa as well. South Africa has constructed massive highways, iconic stadiums, world-class airports and state-of-the-art technology platforms. The target for human settlements ought to be nothing less than an enhanced vision driven by a similar energy and passion as associated with the current construction around the 2010 Fifa World Cup. This time round, we are focusing on Human Settlements 2030. To that end, we as South Africans must explore the possibility - and we can - of marshalling resources in a similar fashion to the way we impressed the world, but this time to move our people from the depression in which they are, many of whom would like to be impressed by new abodes.
The current large-scale mobilisation of human, capital, financial, logistical, construction, and project management resources should not dissipate after the 2010 Fifa World Cup. The objective should be to turn the country into one large construction site, as is happening. In this regard, we welcome the new National Planning Commission, NPC, whose responsibility is to develop an overarching national strategic plan. Our human settlements planning tasks can only succeed within the ambit of a framework developed nationally.
In crafting our vision, we are mindful that a child born today will be 20 years old by 2030, and will need somewhere to live. We are planning for the needs of that future adult. To succeed, Human Settlements 2030 must be for and by the youth. It is about their future homes, apartments, bachelor flats, and so on. This should be their campaign.
Housing construction and manufacturing are some of the key drivers of the economy. They stimulate every sector - mining, agriculture, manufacturing, construction, wholesale, retail and, most importantly, finance. There is no successful industrialised nation which has human settlements on the backburner or merely as a welfare issue. In this context, the department is forging stronger relationships with the financial sector, which plays a central role in providing credit and housing finance, as we indicated with our R1 billion fund, to provide a guarantee for them to forward more credit.
During recent engagements with the country's major banks, we came away satisfied with the positive outcomes, and we can confirm to the NCOP that we agreed to form a joint working team to look into various aspects of housing finance, including how to generate innovative ideas around the R1 billion guarantee fund.
Let's come to the current budget. As we plan and implement our expenditure in this financial year, it is appropriate that we emphasise several positive developments taking place in human settlements.
Firstly, we can report that provinces spent a total of R12,2 billion or 98,4% of their allocation by 21 April this year. Secondly, there is an increased roll-out of sanitation infrastructure programmes in rural areas. Thirdly, significant progress has been made in building local government capacity through our municipal accreditation process, in which all six metros and four local municipalities have been assessed. Fourthly, the Sectional Titles Schemes Management Bill and the Community Schemes Ombud Service Bill are going to be introduced to Parliament this year. This will include the Social Housing Bill as well, which will be referred to as the human settlements Bill for the first time.
Good progress has also been made in two crucial areas of work: our war on waste, and our deeper resolution against corruption. Preliminary expenditure reports for the 2009-10 fiscal year indicate that we have saved R53,2 million in operational expenditure. This includes a saving of R20,6 million in cuts to travel and subsistence, R24,4 million in cuts to our advertising budget, and R3,3 million in cuts to administrative fees. In addition, R31 million was saved from personnel expenditure and R34 million from transfers to our institutions.
With regard to intensifying the fight against corruption, as part of our ongoing battle against corruption I appointed a National Audit Task Team last November, headed by the Special Investigating Unit, SIU, working in partnership with the Auditor-General's office, our national department, and provincial government representatives. I'm happy they are here.
The task team is hard at work tracking down those responsible for corruption, abuse and malpractices. What have they achieved? Working under the sterling leadership of the Head of the Special Investigating Unit, SIU, Willie Hofmeyr - somebody I know very well - the team has made tremendous progress since its appointment and has almost completed its investigation into abuse of the low-income housing subsidy schemes. Sir, 1 570 officials have been arrested to date, of whom 1 189 have been convicted, and R38 million has been recovered. We are sad to announce these things, because government officials should not behave in this manner. This process has also seen five lawyers struck off the roll. And more is to follow, as we are undeterred in our resolution to eradicate this plague.
Additionally, it is noteworthy that Cabinet has created an interministerial task team to address the scourge of corruption, no matter who may be involved or how high they are, as the President indicated.
It would be remiss of us not to highlight some fundamental challenges to the delivery of sustainable human settlements. The first relates to what we characterise as the legalisation of illegality. This refers to the negative impact of unintended consequences emanating from certain landmark judicial rulings on the human settlements mandate. In some cases, court rulings have forced the amendment of human settlements policy, with severe and unplanned budgetary consequences. The most recent and far-reaching is a ruling against the Johannesburg Metropolitan Council, JMC, where the city has been ordered by the Gauteng High Court to pay rent to a private company on behalf of illegal occupants until alternative accommodation has been found for such illegal occupants.
While being dutifully circumspect about the constitutional independence of the judiciary, the Ministry of Human Settlements is concerned about rulings that could virtually collapse government budgets and plans where unlawful behaviour, in this case illegal occupation of land and buildings, is legitimised by a series of court rulings. It is not amiss to say that if they were to occupy this House and were determined to do so, you'd have to find alternative accommodation for such people.
My colleague, the Minister of Justice, Jeff Radebe, has been mandated by Cabinet to take the lead towards the resolution of this matter, in consultation with Human Settlements. This House will need to itemise this discussion.
Of equal concern are bureaucratic blockages which affect every step of human settlements delivery. As part of its outcomes-based approach, government has resolved that we must make our work simpler, reduce compliance work that adds no value, and focus our energies on a few deliverables, and do them well. The Ministry of Human Settlements could not agree more.
We conclude by saying that we remain seized with our fundamental mission of rolling out sustainable human settlements. We do not underestimate the enormity of the task involved. We appreciate and welcome the constructive criticism that has always come from this House, particularly from the select committee. We are equally encouraged by the comments and sense of common purpose shown by our human settlements MECs.
We are enthused by the fact that our institutions are ready to be in the forefront of the drive to create sustainable human settlements. We remain sincere in our dialogue with the poorest of the poor. We also remain convinced that the unfolding strategy around Human Settlements 2030 is the right one, and builds upon the other achievements in this area over the past 16 years. This Ministry carries a responsibility to all South Africans, who have the right not just to a home but also to privacy, security and comfort in their homes within the human settlements in which they live in. I still repeat that I hope Public Works will come on board with part of their budget. Chairperson, I thank you. [Applause.]