Defence and Military Veterans Budget: Committee Report

Meeting report

The Chairperson welcomed the Members and the support staff to the meeting. He then open the floor for the support staff to present the draft report, particularly focusing on the observations and recommendations that were made by the Committee.

Mr Wilhelm Janse van Rensburg, Committee Researcher, Parliament of South Africa, presented the first part of thedraft report of the Portfolio Committee on Defence and Military Veterans on Budget vote 19. He focused on the key committee observations and recommendations to the Department of Defence (DOD). During deliberations with the DOD on 3 July 2019, Members of the Committee made several observations related to the budgetary allocation, the performance indicators and the targets set in the APP

Committee Observations:

-The Committee expressed its concern regarding the current financial constraints within the defence domain and that this may impact negatively on the ability of the SANDF to fulfil its constitutional mandate. Most significantly, the Committee noted the fact that, for the past three financial years, insufficient funds were available to cover expenditure related to compensation of employees and that the expenditure ceiling in this regard were breached. The Committee noted the observation made by the DOD that it aims to explore additional sources of revenue, such as the sweating of assets (notably land).

-Related to the first observation, the Committee noted with concern the decreasing ability of the DOD to address capital acquisition due to limited funding and the potential negative effect this may have on the replacement of ageing defence equipment. The Committee also noted the observation by the DOD that such reductions may, in turn, result in the loss of defence capabilities that will be very costly to restore.

-Members of the Committee noted the difficulties expressed by the DOD in terms of force rejuvenation and concerns regarding the increasing age of military personnel, notably at lower rank levels. The Committee acknowledges the observation by the DOD that the absence of a feasible exit mechanism contributes significantly to challenges related to force rejuvenation.

-Border safeguarding by the SANDF emerged as a key focus area for the Committee. The Committee noted concerns around the following:

• That the current deployment of 15 SANDF sub-units along South Africa’s borders are insufficient and that at least 22 sub-units are required.
• The need for technological force multipliers to assist deployed forces along the land borders.
• Shortages of suitable air assets at the SA Air Force’s 35 Squadron as well as 28 Squadron to effect border patrols.

-Members observed challenges with the SANDF’s Logistical support to operational equipment. Specifically, the need for aircraft spares were raised. As a related aspect, Members noted the urgent need for the SA Air Force to replace the current C-130 transport aircraft capability.

-The Committee welcomed the importance placed on cyber security by the DOD, but noted concerns around funding to further develop this capability.

-Members expressed concern around ongoing delays to Project Hoefyster that relates to the replacement of the ageing SA Army’s Infantry Fighting Vehicles with a modern fleet.

Members expressed dissatisfaction with the reduced training targets across the various programmes of the DOD.

The Committee highlighted the reduction in flying hours for the SA Air Force and sea hours for the SA Navy as a significant on-going concern that impact negatively on operational deployment.

Members noted the DOD’s concern about outdated ICT systems, notably the Finance, Human Resources and Logistics systems.

The Committee welcomed an explanation form the DOD on its current involvement in various development and upliftment projects, such as its involvement in the Vaal river restoration project and assistance to Mozambique during flooding. The Committee further highlighted the need to effectively communicate these involvements to the public.

Members of the Committee raised concerns regarding the status of the Special Defence Account (SDA) and whether sufficient funds remain to ensure capital acquisition for the DOD. The Committee also noted the need to maintain the necessary security of information regarding acquisition plans within the SDA.

-Members of the Committee questioned the increases in the allocations for Food and Food supplies in Programme 2 (Force employment) and Programme 8 (General Support).

-The Committee welcomed the DOD statement that it remains involved in disaster aid and relief where ordered to do.

-The Committee expressed its concern regarding the shortage of some uniforms, especially camouflage uniforms, in the SANDF.

-The Committee welcomed the statement by the DOD that Projects Biro and Hotel remain on course as these will add valuable Inshore Patrol Vessels and Hydrographic capabilities to the SA Navy. The Committee expressed the need that funding constraints should be addressed to ensure the timely delivery of these vessels.

Members highlighted the potential that the exploiting of Intellectual Property within the DOD holds and encouraged progress in this regard.

Recommendations

The Comittee identified the areas below that will be subject to monitoring by the Committee throughout the 2019/20 financial year.

-In order ensure the SANDF’s rejuvenation, the Committee requests the DOD to urgently redevelop its exit mechanism to balance the need for force rejuvenation and current national concerns around unemployment and skills shortages. The DOD should provide the Committee with information on how it intends on redeveloping this exit mechanism, including clear milestones with dates for execution that will allow the Committee to track DOD progress in this regard.

-The Committee strongly recommends that there must not be any reduction in personnel and that the current personnel contingent should be funded appropriately. Discussions around personnel strength and compensation of employees will be central to the trilateral engagement between the PCODMV, the DOD and National Treasury. This issue will be further followed during the annual Budgetary Review and Recommendations Reporting (BRRR) process.

-The Committee recommends that Parliament’s Joint Standing Committee on Intelligence meet with the DOD as soon as possible to discuss the standing of the SDA and the impact thereof on capital acquisition. This is to ensure that the Department accounts properly and appropriately to parliament on this sensitive issue.

-Border safeguarding remains a key function of the SANDF and the Committee acknowledges capacity constraints in this regard. As a means to assist with addressing capacity constraints, the Committee recommends the increasing use of technology as a force multiplier for border safeguarding. The DOD should further provide the Committee with details of current land, sea and air border safeguarding efforts, including recent successes and challenges. A cost outline for the increase of the number of sub-units along the land borders should also be provided

-The reduction in flying and sea hours remain a particular concern. The Committee recommends that the DOD reports, on a quarterly basis, progress in the attainment of the 17 200 flying hours. A further breakdown of the total number of flying hours (for training, operational, force employment, and VIP purposes) will further assist the PCODMV in its oversight. Information on the number of flying hours chartered by the DOD, as well as the cost of such chartered flights, should also be provided. Similarly, the PCODMV recommends that the DOD reports, on a quarterly basis, on the progress being made to attain the 10 000 planned sea hours for the SA Navy.

-The Committee recommends that the DOD increase its efforts to communicate its successes in international peace missions, disaster relief and domestic development and upliftment initiatives with the public.

-The DOD should provide the Committee with an explanation for the significant increase in the allocation for Food and Food supplies in Programme 2 (Force Employment) and Programme 8 (General Support).

-The Committee urges the SANDF to urgently address the stated shortage of some uniforms in the organisation.

-Outdated ICT systems, notably the Finance, Human Resources and Logistics systems is of concern to the Committee. The DOD should therefore report to the PCODMV, as part of its quarterly reports, on plans and progress in addressing these ageing systems.

-The Committee urges the DOD to continue to establish and develop its cyber-warfare capability and to make use of existing pockets of knowledge, such as expertise at the South African Military Academy, to develop this capability.

Mr Peter Davids, Committee Content Advisor, Parliament of South Africa, presented the second part of the draft report of the Portfolio Committee on Defence and Military Veterans on Budget vote 19. He focused on the key committee observations and recommendations to the Department of Military Veterans (DMV).

Observations

The Committee made the following observations in terms of the 2019/20 APP and 2019/20 Budget allocation to the DMV:

 -The Committee raised its concerns regarding who qualifies to be a military veteran as it was, inter alia, noted that some military veterans appear to be eighteen or nineteen-year old; that former Military Skills Development System (MSDS) are also applying for the benefits; and that there are numerous SANDF members on the database. The DMV explained that the first step to qualify as a military veteran is in terms of Section 1 of the Military Veterans Act (No. 18 of 2011) and secondly, to be registered on its National Database. Questions were also asked around the eligibility and justifiability of former Transkei, Bophuthatswana, Venda and Ciskei (TBVC) states’ members, Self Defence Units (SDUs), and especially former South African Defence Force (SADF) members. The Minister explained the context in which the Act was drafted and expressed the hope that amendments to the Act will be able to address some of these issues.

-Given that the Military Veterans Benefit Regulations determine the means tests for the different benefits, the Committee raised the need for the Regulations to be reviewed. It further inquired about the role of the means test regarding the eligibility of military veterans to benefits.

-Members expressed their concern regarding the slow roll-out of the housing benefit and especially that the annual target has been decreased from 1 000 to 400 for 2019/20 and onwards. Questions were also asked around the distribution of housing between rural and urban based military veterans. The Department explained that it is not the implementation agency and do annual transfers to the Department of Human Settlement based on certain agreements and gave the assurance that where serviced sites are available, housing is provided in rural areas.

-A concern was raised around the slow progress made with provincial offices as DMV only has three functional provincial offices and that this restrict the access of military veterans to the department. It was explained that the procurement of offices is done through the Department of Public Works and that this is part of the reason for the slow progress to establish provincial offices.

-The Department has an annual target “Percentage of approved burial claims paid within 30 days” and the Committee expressed its concern around this performance target and held the view that this period should be shorten to assist the bereaved families sooner.

-Concern was expressed regarding the accessibility to health services for military veterans as many are staying far from such facilities. The Department indicated that the delivery of these services are sensitive and complex due to various reasons such as a limited budget, the accessibility of military health facilities where they depend on the SA Military Health Services (SAMHS), and the fact that the Department of Health cannot give preference to military veterans.

-The Committee pointed out that many municipalities are not aware of the Department and the role it plays in alleviating the plight of military veterans, and wanted to know how the department plans to integrate itself with this level of government that is the closest to the people. The Department responded that their cooperation with municipalities vary as with provinces where some are working with the department while others are not too keen to do so.

-Noting the increase in the utilisation of consultants and contractors over the medium-term, the Committee enquired around their role and cost implications of this item. The DMV indicated that part of the increase relates to outsource services to address the 30-day payment of invoices. While acknowledging the need for contracted services like skills development, repairs and maintenance, the Committee noted that this is still a substantive amount.

-The Committee raised its concerns regarding the slow progress to verify and finalise the National Database for military veterans, especially given that it is the entry point for military veterans and their dependents. A verified and finalised database will allow the department to improve their planning and outline their financial projections more accurately.

-The Committee questioned whether the DMV is actually serving its purpose especially once the military veteran has passed on and her/his relatives are left behind. The Minister explained that this is one of the main challenges for the Department as statutorily, dependents are only entitled to certain benefits, which can leave them destitute once the military veteran has passed on.

-The Department was asked whether it is sufficiently integrated with civil society and whether it was sufficiently transformed. These aspects could assist the Department to improve awareness of its services and especially improve the delivery of benefits to deserving military veterans and their dependents. The Department indicated that it is fairly representative of the broader society but that it can improve its relationship with civil society.

-The Committee noted the demand for health services for military veterans and stressed all avenues should be explored to address this much needed benefit for deserving military veterans. The late or non-payment of service providers was also noted against the background that these service providers refuse to deliver services until they are paid, leaving the military veterans destitute.

-Note was taken by the Committee of the restricted budget and what can be realistically achieved with the allocated budget. The Committee requested the Department to indicate how they prioritise certain benefits. The Department explained that there will always be competing priorities and if they were fully funded, they could have delivered more benefits. Cost pressures include housing, health and bursaries. The Department is deliberately prioritising social benefits over other benefits, given its impact to alleviate the plight of military veterans and their dependents.

 Recommendations

 -The Committee recommended that the DMV submit the Amendment Bill as soon as possible in order to, inter alia, address the definition of a military veteran and who should be given preference in the allocation of benefits.

-The Military Veterans Benefit Regulations need to be changed in order to adjust the values to allow it to keep track of inflation. The Committee recommended that the Department should finalise the changes to the Regulations as soon as possible, and provide an updated report to the Committee on the eligibility requirements for each of the benefits.

-The Committee recommended that the Department should strengthened its partnerships with the respective implementation agencies at national, provincial and local government levels to fast track the delivery of housing to deserving military veterans and to address the skewed urban/rural split. It should specifically review the service delivery model to identify the challenges and remedy these accordingly in cooperation with the relevant stakeholders. The Committee also noted the renovation of dilapidated houses belonging to military veterans and requested the department to keep it abreast of the number of houses renovated as well as the cost implications.

-The Department was encouraged to enhance its efforts with the Department of Public Works to establish provincial offices, as this will not only facilitate easier access for military veterans but also increase awareness of the department and its function around the country. However, the Committee recommends that the DMV keep financial constraints in mind and that the DMV should seek affordable offices and cooperate with other departments for office space where available. The Committee further recommends that the DMV investigate the possibility of being accommodated at military bases around the country given the SANDF’s national footprint, and the financial constraints of the DMV.

-The Committee recommended that the Department should improve its turn-around time of the payment of burial support. The Department should align its processes through, inter alia, improving awareness, educating military veterans and their dependents as well as establishing provincial offices to enhance access to the Department. The Committee further felt strongly that these payments should be done within 48 hours.

-The accessibility of health services for military veterans is a very important benefit given that the majority of military veterans are ageing and the Department was encouraged to further investigate this issue to address the challenges around it.

-Given that not all municipalities prioritise military veterans, the Committee recommended that the Department should further enhance its cooperation with the South African Local Government Agency (SALGA) and related structures to ensure the required cooperation with municipalities across the country. The engagement with municipalities and SALGA should, however, be conducted within the Intergovernmental Framework as espoused in Chapter 3 of the Constitution. The Committee further recommends that the Department report back to it on this issue and its outreach programmes on a continuous basis, starting with the 2019 quarterly and annual reporting sessions.

-The Department was encouraged to reduce its reliance on consultants and contractors and to ensure that one of the requirements to appoint them, should be that they impart some of the related skills to employees of the Department. The Committee further urges the DMV to ensure that contractors and consultants are not utilised unnecessarily where a service could be provided from within the DMV and if possible, by the DOD.

-The DMV should submit a report to the Committee, no later than 15 September 2019, of all consultants and contractors utilised by the Department in 2018/19 and thus far in 2019/20, the value of such contracts and a brief description of the service rendered.

-The Department admitted that the Database is one of their serious challenges and the Committee recommended that it should further enhance the integration of the database with institutions other than the Department of Home Affairs, such as the South African Revenue Services and the South African Police Service.

-The Committee recommended that the Department should investigate how dependents can be assisted once the military veteran has passed on and should consider including this as part of the amendments to the primary Act.

-The Committee recommended that the Department should improve its relationship with society in general and not only focus narrowly on military veterans and their dependents. This will assist the overall transformation and integration agenda of the government.

-The Committee agreed that the Department of Health and the SA Medical Health Services should enter into discussions to see how they can better assist military veterans and their dependents with regard to medical services. It is further recommended that the Department should ensure that late and non-payment of service providers are eliminated to ensure the continuous provision of health services to military veterans. The DMV is also encouraged to strengthen its relationship with provincial hospitals to cater for the medical needs of military veterans, and should report to the Committee on this issue on a continuous basis.

-The DMV should supply the Committee with a copy of the means test utilised to determine whether a military veteran qualifies for a specific benefit, at the next quarterly report briefing.

-The Committee noted the Department’s prioritising of social benefits and emphasised that given the reliance on other government departments, the Committee should play a stronger oversight role in this regard. The Department is further encouraged to investigate whether it can work closer with the Department of Social Development to improve its services and benefits to military veterans and their dependents.

Discussion

The Chairperson thanked the support staff for the quality of the report draft they delivered. He praised themfor packaging and presenting the work in a professional manner, despite working under a tight schedule. He then opened the floor to the Members for a general discussion about the posture that the report should take.

Ms D Dlakude (ANC) first thanked the committee support staff for its commendable work in compiling the draft report. She then proposed that there should be specific timeframes put in place for the delivery of the reports to the Committee and that these should be observed and adhered to, by the Department. Failure to do so would suggest that the Department could not fulfil its mandate.

Mr S Marais (DA) concurred with the Members on the outstanding quality of the draft report. In his view, the report captured exactly what it was set to. He also asked the staff to submit two different reports - one for the DOD and the other for the DMV - for the same budget vote.

Mr T Mmutle (ANC) welcomed the draft report. He asked that there should be a distinction between observations and questions about the contents of the report, from the Committee, because the questions were answered by the Department during the previous meeting and do not need to be reiterated in the final report. These observations would then translate into recommendations that would be executed by the Department.

Mr N Matiase (EFF) pointed out that there had been a drastic reduction in the Military budget allocation and expenditure. The total was currently, approximately R48 billion, which represented about 1.1% of the total GDP. This was minute in contrast to the R213 billion (about 15% of the GDP) that was allocated to the Department of Education (DOE). While 15% for the DOE was warranted, 1.1% for the DOD was simply insufficient and the Committee should lobby for an increase in the amount of funds allocated.

Mr Matiase said that the Minister of Defence made two contradictory statements during her 2018 budget speech:

“South Africa is a peaceful country that lives in harmony with its neighbours. However, the unpredictability of the strategic environment, together with emerging conflict trends on the African continent, requires us to maintain a credible military force as a deterrent.  Some of the countries in the SADC are injecting financial resources to build their military capacity through acquisition programmes. Conversely, South Africa is on a path of reduced defence expenditure”. In his view, a decline in total expenditure is a contradiction.

Mr Matiase claimed that there was a lack of transparency in relation to the Special Defence Account (SDA) and its utilisation. The Committee needed to summon the DOD to thoroughly explain the utilisation of the SDA. He added that there was an inconsistency in the terminology used to refer to the structure – the annual performance report of the Department referred to it as the Strategic Defence Account.

Mr Matiase then spoke about the International Peace Mission and Operations and highlighted the need for transparency concerning the operations of the South African Military Force in countries such as the Democratic Republic of Congo (DRC) in fulfilling its continental obligations. He further emphasised that there had to be disclosure of any business interests that would be protected during the undertakings, citing the exposure of the soldiers to unnecessary, military casualties and dangers in pursuit of selfish agendas.

Mr Matiase proposed that Armscor’s role must be re-evaluated, strategically repositioned and recapitalised in order to fulfil other societal interests, in undertaking innovative and creative manufacturing operations – both for military and commercial commodities and equipment. He added that it must broadly contribute in manufacturing industrialisation and the production of upstream and downstream commodities. Until such recommendations were considered, the financial report would not be endorsed by the EFF.

The Chairperson agreed with the majority of Mr Matiase’s views but also ruled that that the agenda of this particular meeting did not cater for such an engagement; the matters he was raising were suitable for the budget debate in Parliament.

Mr J Maake (ANC) suggested that the recommendations should be prefaced with a brief introduction derived from the observations. There had to be an explicit recommendation to prevent the decrease in budget allocated for the Department.

The Chairperson seconded the need for the report to be consistent with the prescribed descriptive terminology. He also agreed on the necessity of timeframes within which the recommendations were to be executed and suggested that the Departments must comment on the report by the time of the quarterly report briefings, in order for all the recommendations to have a definite timeframe. These reports should continue to underline the Committee’s ongoing discussions with the Department.

The Chairperson also pointed out there were duplications in the resolutions for Armscor and the Defence Force: the common resolutions should be included for only one of the two, where it was more fitting. He raised a concern that ordinary readers may not understand the background of the crucial contents of the report; this included acronyms that had not been defined.

The Chairperson stated that Denel (entity) should be more elaborately mentioned in the report, despite the entity not being under the supervision of DMV or DOD. He added that the matters that were discussed by the joint committee should not be included in the report.

He also supported the concern about the decline of the budget allocation because of the negative effect it would have on the implementation and realisation of government policy. The Committee should firmly express its disapproval of the continuous decline of the budget.

Mr Marais clarified that the duplications were caused by the fact that DOD would be the asset holder but Armscor would be the implementing and acquisition agent. He then expressed that during the discussion on border protection he also referred to the need for regional stability as well as providing logistical support for the soldiers operating in DRC, by replacing the C130 aircraft. This observation was not included in the draft report. The recommendations also did not include the need to report on the cost of leasing charter aircrafts in contrast to the state acquiring its own cargo aircrafts. He also expressed concern about the possibility of the SA Medical Health Services practitioners refusing to provide services to the veterans because of not being remunerated for this by the DOD.

He further recalled that, at the previous meeting, he asked about the dispute of custodianship of intellectual property between Denel and Armscor.  The matter should be sorted out. The Department must also clarify whether the dockyard management would be done by Armscor or transferred to a private company or a different stakeholder that would be procured.

Mr Maake proposed the removal of the observation on page 23, speaking about the urgent need for an in-depth analysis of the SDA at parliamentary level. His understanding was that that element was directed to the Joint Committee on Intelligence.

Mr Maake suggested that the Committee recommend that the Department should respond to all the recommendations submitted to it, by its next quarterly report. He was not comfortable with the phrasing of the recommendation that mentioned the DOD having to reprioritise its funds because it had a limited budget. There would be no way to reprioritise funds without compromising the level of training for the soldier intakes. Thus, the Committee should strongly disagree with any budget cuts for what the DOD has prioritised. There should be a trilateral engagement between the Parliament’s Defence Committees, the DOD (along with Armscor) and the National Treasury (NT) to discuss ways of rather providing more funds to the DOD. The Committee should also allocate a timeframe for the meeting that would be about discussing possible ways through which the different municipalities could prioritise helping military veterans within their respective constituencies. During a previous debate there was a suggestion about the castle being used as a heritage, cultural and educational institution to inculcate patriotism. This should be included as a recommendation under part B.

Ms Dlakude emphasised that there were matters that did not belong in the report because they were not suitable for public consumption and could jeopardise national security. She concurred with Mr Maake about the removal of the recommendation concerning reprioritisation of funds. She then suggested that the army bases in some of the province should be used as interim provincial offices to alleviate the financial constraints facing the DOD. The turnaround period for burial claims, by the family members of the deceased veterans, should be at least within 48 hours of the deaths and the dependents of deceased military veterans should be taken care of by government, particularly the DMV.

Ms Dlakude pointed out that SANDF members are trained in several traits and could use their skills to assist in alleviating some immediate needs. The Department could then outsource some of the services and resources they do not have.

Mr Mmutle proposed that the second recommendation on page 24 should be removed and should only be appended to a progress report after the imminent meeting between the Committee, the DOD and NT, if the resolutions of that meeting were not be implemented. He agreed with the members about the removal of the recommendation about the reprioritisation of funds. He then stated that the Department should take advantage of technology to complement the financial deficit it experienced.

Mr Matiase pointed out that the DMV should not only supply the Committee with a copy of the means test used to determine the veterans’ qualification for benefits but also with the eligibility requirements. The means test was supposed to be after eligibility screening process. He explained that being old aged was not only a military liability but also a social and economic liability which required a multi-disciplinary approach from all relevant departments.

Mr M Shelembe (DA) said it was concerning that there were many municipalities that were not aware of the role played by the DMV because it affects the accessibility of the resources that were due to the veterans, from the municipalities. He also raised the need for a clear timeframe within which the Department of Health (DoH) was expected to engage the SA Medical Health Services to find ways of better assisting military veterans and their dependents.

The Chairperson clarified that there were certain matters which the Committee was mandated to continuously oversee and introducing timeframes for such matters could impede that oversight process.

Ms A Beukes (ANC) expressed the need for the Committee to set realistic timeframes in order to not compromise the quality of the reports.

Ms Beukes stated that the annual targets that have been set by the DMV had been influenced by the implementation of the Department of Human Settlements. Realistically, targets would never be met because of the implementation challenges that originated from the flaws in the agreement between the DMV and the implementing agencies. The agreement may need to be revised because of this.

The Chairperson stated that there needed to be an increased awareness, amongst local community members, about the programmes that were taking place at the castle, for the benefit of the public.

Mr Marais agreed on the idea of making the SDA detail classified and not published for public consumption; even the Committee should not get the information in an open session. The Committee still had an oversight obligation. The joint standing committee was focusing on the operational elements instead of the budgetary items of the SDA – the latter was part of the Defence Committee budget.

He then cautioned the Committee about the existence of the Defence Review and NT guidelines that needed to be adhered to. He clarified that the reprioritisation of funds was in terms of the current core deliverables of the SANDF. For example, there were a lot of unused fighter jets while there was no logistical support for the troops that were on mission; hence the need for reprioritising funds.

Mr Marais moved for the adoption of the report with amendments.

Mr Mmutle seconded Mr Marais’ motion.

Mr Matiase objected to the adoption of the report.

The Chairperson declared the report to be adopted.

The meeting was adjourned.