Department Budget: briefing

Meeting report

JOINT STANDING COMMITTEE ON DEFENCE
13 March 2003
DEPARTMENT BUDGET: BRIEFING

Documents handed out:
Defence Budget 2003: Vote 22 - programmes and allocations
Presentation on Department Budget 2003/04 (document will be available here Tuesday, 24 March)

Chairperson: Ms T Modise (ANC)

Present:
Mr J Masilela, Secretary of Defence
Mr J Gründling, Chief Accounting Officer
Mr B Engelbrecht, Director of Budget.

SUMMARY
The first part of the meeting, on the Department's Strategic Plan, was closed to the public and media. The second part was a briefing by the Department of Defence on the Defence budget for 2003/2004 and the allocation of R20 050 078 000. Members questioned the Department on a decision taken two or three years ago, but never acted on, to second members to Parliament in order to keep parliamentarians informed. They also questioned the Department on what happened to the millions allocated to the Service Corps. The Department explained that they had accounted to SCOPA on the Service Corps, and envisaged a settlement programme. They were unable to meet the Service Corps mandate and are holding discussions with the Presidency on its future.

MINUTES
Mr Engelbrecht: Vote 22, as published by the Department of Finance, allocates R20, 050 billion for 2003/04, R20, 489 billion for 2004/05 and R22, 532 billion for 2005/06. The Department of Defence aims for funding allocations of 30% on personnel, 30% on operating expenses and 40% on equipment. Personnel expenditure is currently 35%, but this hampers both the operating and acquisition sides of the budget. Defence needs 2% of GDP by 2006/07 instead of the 1.6% currently allocated.

The Minister of Finance has allowed an additional R312 million, R392 million and R413 million over the three financial years for four helicopters required for the corvettes. The Strategic Defence Acquisition costs for 2003/04 are R8, 247 billion rising in 2004/05 to R8, 325 billion and in 2005/06 to R9, 694 billion, and represent 41%, 41% and 43% of the budget.

Adv Schmidt (DP): Military health support costs are rising by a higher percentage than the overall budget. Why?

Mr Gründling: Health support costs have grown because of the health of members, and in addition, inflation in the health sector has been 23%.

Mr Middleton (ANC): In the presentation, under the heading, "Allocation per sub-programme", there is a reference to political direction at a cost of R12.9 million. What does this refer to?

Mr Gründling: Political direction is the cost of supporting the Minister and his staff of twelve to sixteen people. There is also the Human Resource Support Services allocation of R232.6 million, which is transfer payments to Armscor for the acquisitions.

Mr Blaas (NNP): How are you getting rid of inventories and redundant stores that are of zero value to the SANDF?

Mr Gründling: We have very good plans in place to dispose of stocks, and we will ask for that money to be allocated to the DoD to fund future purchases.

Mr Diale (ANC): Under the heading, "Allocation per sub-programme", there is reference to R50.6 million allocated to sensitive projects. What are these?

Mr Gründling: Sensitive projects are approved by the Ministers of Defence and Finance. There are a handful of projects including military intelligence and military police.

Ms Modise (ANC): The DoD has R660 million for administration and enhancement of civilian control. Two or three years ago it was agreed to second members to Parliament in order to keep parliamentarians informed. What has happened to that secondment? Why was it ignored?

Mr Masilela: We will revert back to you on that.

Ms Modise (ANC): I think it was ignored, and has become detrimental to the relationship between the DoD and Parliament. What about the Service Corps? What has happened to the millions allocated to the Service Corps?

Mr Masilela: We accounted to SCOPA on the Service Corps, and we envisage a settlement programme. We have been unable to meet the Service Corps mandate, and are holding discussions with the Presidency on its future.

Modise (ANC): The debate on the Defence Budget is in April. We will request another meeting with you before then.

The meeting was adjourned.