Chairperson, Deputy Chairperson of the NCOP, hon Ministers and Deputy Ministers, my fellow MECs, hon members of the NCOP, and ladies and gentlemen, it is indeed fitting that I have an opportunity to address the NCOP today. This week my department in the province of the Western Cape is hosting a Rental Housing Showcase Week. Today is also the second day of the Interprovincial Rental Housing Forum, at which all provincial departments are represented, and where they can share experiences and learn from each other - from both their successes and their mistakes. This House, too, provides a platform to share different perspectives from the various provinces. This morning I launched our province's Rental Housing Strategy, which spells out our vision for rental housing in the province and how we intend to work towards that vision over the next five years.
Rental housing is an important element of our delivery of housing opportunities. I agree with Minister Sexwale and his department that we need to grow our rental stock in the province. As I said during my budget speech, giving away free houses is not sustainable in the long run, but providing rental stock is, especially through public-private partnerships.
In my department we have created a directory of affordable housing for human settlements. The key role of that unit will be to build strategic partnerships with civil society and the private sector, and to increase the financing and development of affordable housing, both bonded and rental, in the province. I am sure that the R1 billion that the Minister spoke about, which is a guarantee fee, will assist us greatly in this regard, but we must still be proactive in ensuring that financial institutions and developers partner with us to increase the private sector's investments in this market.
But it is not only pragmatism that drives our intention to increase rental stock. It is also about increasing choices. That is a key principle of the open opportunity society for all. Not everyone who comes to the Western Cape wants to make a home here. We are mindful of the fact that some people come here for economic opportunities, with the intention of returning to their province of origin one day, or they wish to move from place to place, seeking employment before settling down. For them, rental might be a better choice than a permanent home that they own, which locks them into one place. We need to make that choice available. I believe we need to expand even further the choices we make available to potential beneficiaries.
Another area where the Western Cape province has found close alignment between our five-year strategic plan and the plan of the national Minister and his department is the prioritisation of serviced sites over the next five years. The national department has a target of 500 000 sites over the next five years. We intend to contribute about 150 000 sites by 2014-15. In the context of the limited resources at our disposal, we believe that doing a little for many, rather than a lot for only a few, is the right approach to tackling our backlog. Once we have assisted most of our citizens to gain secure tenure on a site with access to basic services, we can start to shift the focus of our funding back to the building of top structures.
I must say that this was evident in the area of Du Noon where more than 500 people became victims after the fire on Sunday morning. One of the reasons why we have the problem of fires in our areas is because people are living under appalling conditions with no services at all. I know that some critics are saying that it is inferior service that we want to provide as a department, but I think the point that we are making about this is very clear. Because of the limited resources in funding that we have, it is better that we buy Volkswagen Polos for our people now, so that when the time is right, they can trade in the Volkswagen Polos for BMWs. I think that is the point that we are making about this approach.
We would like to ask the national Minister to consider increasing the options available to people receiving transfer of the serviced sites. One option that I favour is the People's Housing Process, PHP. I know that the hon Deputy Minister shares my view, because she spoke passionately about it at the handing-over ceremony of the first phase of a PHP project in Philippi last Saturday. One of the reasons why I feel strongly that this programme needs to be supported is that it has an element of sweat equity- skills transfer empowerment. People really take part in the construction of their houses and, as a result, these are not the kind of houses that are often sold or rented out, as is the situation in most areas.
Having beneficiaries actively involved in the planning and construction of their homes instils a sense of ownership of and appreciation for the value of their assets. But we have very limited funding for building top structures. We need to get creative and provide incentives to encourage people not to wait for the state to build their houses. The R1 billion guarantee fund will service the gap market, but we need to consider a micro loan instrument that allows people earning less than R3 500 to gradually fund the building of their houses.
People must have a choice. They can choose to live in their shacks on a serviced site provided by the government while they wait for their turn to receive a house, which might take 5, 10 or 15 years, or they can choose not to wait and approach their employer or a micro finance institution to start building their own homes. If we can develop a sustainable lending model and then add a portion of our location every year, we can grow the available funds, which will allow people to remove themselves from the needs register at a lower cost to the state. There are, no doubt, challenges and risks to overcome in this proposal, but I believe we must interrogate it.
Some people will ask why they must pay for a house when the government will provide them with a free house. My answer to that question is simple: The government will still provide houses, but it will take us decades to assist everyone who needs a house. If you have the means and the will to take charge of your own situation, then I would like to ensure that you have that option available. I thank you. [Applause.]
Ms M GOVENDER (KwaZulu-Natal): Chairperson, Minister of Human Settlements, Minister of Public Works, Deputy Ministers of both departments, hon members, distinguished guests, in this month when we celebrate Africa Day it is an honour for me to speak in the debate on Vote 30 of the Department of Human Settlements and Vote 6 of the Department of Public Works.
This speech is being given at a time when we are just emerging from one of the most severe worldwide economic recessions in recent times. National economies have been rent asunder; central bankers have thrown themselves at the financial woes; government in turn has developed packages to rescue us from these woes; plans have been derailed; elections are being contested where the state of the economy determines the outcomes; and politics is in flux.
It is our country's first recession in 17 years. Although we have fared better than any other country due to our sound economic policies, the impact has, nevertheless, been severe. This crisis has cost our economy about 900 000 jobs, and many households are still weathering the effects of the recession.
However, unlike many other countries, the basic economic institutions in South Africa are intact. Owing to our prudent fiscal policies, we neither had a debt crisis nor experienced a banking crisis. Our principal funder, the SA Revenue Service, Sars, has recorded an over-recovery of R8,1 billion for the year on revised targets.
The task remains, however, that we have to do more with less. In KwaZulu- Natal we have lost approximately 217 000 jobs. As stated by our premier, Dr Zweli Mkhize, in his state of the province address, our province recorded an estimated 3,5 million people as food insecure. This means that 3,5 million people do not know where their next meal is coming from. From this reality, can we hope for foundations for a better future? Not unless we all do that we should do to optimise resource usage.
Minister Sexwale, in presenting his Budget Vote, spoke of the new outcomes- based approach to defining our targets and measuring progress. Against this backdrop, he identified the accelerated delivery of housing opportunities, access to basic services, more efficient land utilisation, and an improved property market as four prioritised areas of work.
Under the section of housing opportunities in KwaZulu-Natal, we have approved approximately 822 projects that have yielded an estimated 569 998 housing opportunities over a period of approximately 15 years. This figure includes serviced sites to improve the conditions of households, especially with regard to water and sanitation provisions.
For the 2009-10 financial year, we completed a total of 23 587 houses and serviced 3 806 sites. We estimate that we will build 25 002 houses and service 8 001 sites in the 2010-11 financial year.
The subsidies that we approved for the last financial year totalled 21 382 and we project approving 23 435 subsidies for the 2010-11 year. These subsidies will consist of project-linked subsidies, institutional subsidies, rural subsidies, and credit, noncredit and finance-linked subsidies.
During 2009-10, our department implemented in situ upgrades and slums clearance in various municipalities, thereby making progress towards meeting our objective of eradicating all slums by 2014. We completed a total 6 250 houses and serviced 3 506 sites. We anticipate that in the 2010- 11 financial year we will complete 6 502 houses and service 7 091 sites.
There has been a substantial increase in overall housing delivery in rural areas in recent years, particularly in those areas that were excluded by apartheid planning. Factors contributing to this include the following. KwaZulu-Natal is, like other provinces, grappling with the worldwide phenomenon of urbanisation. It calls for a greater focus on rural housing development that can be a developmental pool factor that addresses rural neglect.
Sir, 50% of the backlog statistics in our province indicate that there is a demand for rural housing. Integrated and sustainable human settlement in rural areas will also provide economic opportunities that make rural existence a viable choice.
Therefore, we have focused attention over the past three years on promoting rural development. We have completed a total of 26 328 housing units, which have benefited approximately 118 000 individuals.
A contributing factor to this accelerated rural development is the rapid identification and release of rural land through our continued partnership with and commitment to relevant stakeholders, including the traditional councils. In line with the national and provincial priority of rural development, the department will continue to accelerate housing delivery in rural areas. We have allocated approximately 41% of our budget for this purpose.
The housing service delivery to rural areas will further be enhanced by the construction of 44 900 housing units over the Medium-Term Expenditure Framework, MTEF, period, thereby injecting further development and improvement into the lives of people in rural areas. This programme is destined to benefit an estimated 202 000 individuals over the next three financial years.
We have also partnered with the Departments of Agriculture, Forestry and Fisheries, of Water and Environmental Affairs, and of Rural Development and Land Reform and with private institutions, to ensure that all new housing units built have gardens and trees. This will assist in the provision of food security, income generation and export possibilities, thus contributing to sustainable livelihoods and creating sustainable human settlements.
Here we must welcome the allocation announced by Minister Sexwale of R1,2 billion for the sanitation programme to contribute to rural infrastructure development and offset backlogs for the MTEF period.
The Minister also spoke about the fact that our primary focus is on the poor, but we do have the responsibility for what we afford to middle income earners, enabling them to access affordable housing as well. In this regard, we welcome the announcement by our President of the key new initiatives to accommodate people whose salaries are above the threshold for getting government subsidies, but who earn too little to qualify for a bank mortgage. The establishment of the guarantee fund of R1 billion to incentivise the private banking and housing sector to develop new products to meet this housing demand will go a long way in addressing the needs of the middle-income sector.
In KwaZulu-Natal we have signed a memorandum of understanding, MOU, with Absa, FNB and Standard Bank, and we envisage signing an MOU with Nedbank this year. Nedbank is financing part of the Imbali in Ngwelezana project in Empangeni with 150 units reserved for the middle-income group. FNB is also involved in this project and is financing 500 units. FNB has further confirmed 7 projects totalling 17 675 affordable housing units. Standard Bank has committed to producing approximately 4 000 affordable housing units.
The department will partner with these institutions to ensure that the planned projects are successfully executed for the affordable housing market in line with the President's programme to assist this market through the National Guarantee Fund, NGF.
Rectification of housing stock built between 31 March 1994 and 31 March 2002 has been consolidated, including the engagement of the National Home Builders Registration Council, NHBRC, to assist in the completion of rectification by 31 March 2011.
We have houses in the province that are of a dismal quality due to poor workmanship, inadequate supervision of the construction process, use of substandard materials, and poor infrastructure planning. The list could continue! Government has not been getting value for the money that has been spent. It has been said that housing delivery has been like transporting water in a leaking bucket. There is wastage. It is the end-user who is short-changed, and it is the poor who suffer the most while greedy developers and contractors harvest super profits. Enough is enough! This must change.
I am pleased to announce that the chief executive officer, CEO, of NHBRC, Mr Mashinini, and I have signed an MOU and a service-level agreement. These agreements signify a mutual understanding and a common commitment to ensuring quality products for the beneficiaries of low-income housing.
The NHBRC will support our department to ensure that houses of good quality, which conform to the required building standards and are NHBRC enrolled, are built by service providers registered with the NHBRC. We have also engaged the NHBRC to undertake a detailed forensic engineering investigation into all projects requiring rectification.
We will, as far as is possible, attempt to recoup costs incurred from the service providers responsible. We have referred several cases to the State Attorney's Office. [Time expired.]