Establishment of Electoral Reform Consultation Panel; Election Timetable; DHA, BMA, IEC & GPW Budget Allocations (with Ministry)

Meeting report

The Chairperson welcomed all those who were present in the meeting. He outlined that the Committee would be briefed by the DHA, IEC, BMA, and GPW.

The Committee, he highlighted, noted the recent Constitutional Court Judgement on the thresholds, and the audio recording that has been circulating about individuals receiving their identification documents (ID) to vote.

Thereafter, he asked if any apologies were received.

Mr Eddie Mathonsi (Committee Secretary) mentioned that he received an apology from Ms Liezel van Der Merwe MP, who was unwell.

Ms Janet Love (Deputy Chairperson of the IEC) tabled apologies on behalf of the other Commissioners and the Chief Electoral Officer, who were involved in another commitment.

The Chairperson noted the apologies. Afterward, he handed it over to the DHA to make its presentation.

Dr Aaron Motsoaledi (Minister of Home Affairs) asked if the Chairperson wanted the department to present on the ERCP first.

The Chairperson confirmed that was what he had requested.

Interim update on the establishment of the ERCP

Minister Motsoaledi explained that the closing date for applicants to serve on the Panel had already passed. All that remained was for him to consult with the IEC and report back to the Committee.

Adv Phelelani Khumalo (Head of Legal Services: DHA) provided Members with a brief background on the process thus far. In December 2023, the Minister presented a report relating to the work that had been done to establish the Panel. During this presentation, the Minister submitted 9 names from the list of nominees received. After its deliberations, the committee resolved that the Minister publish a new notice, as it believed the Panel lacked demographic representation.

A new notice appeared on 12 December 2023 with the closing date for the submissions of names set as 19 January. The total combined number of names received sits at 32, of which 7 are female and 2 are below the age of 35. The department felt that there were nominees who fully met the requirements requested, and had been cleared by the vetting process.

All that remained was for the Minister to consult and resolve with the IEC on the 9 names to be submitted.

Minister Motsoaledi asked when the department could respond to the various allegations made on social media regarding IDs.

The Chairperson said it could do so now.

Social Media Allegations

Minister Motsoaledi said: “we saw the clip because [a lot] of people sent it to us because they were worried”. In the clip, an unknown man claimed that he votes both in Zimbabwe and South Africa.

“Fortunately in the clip, [the person] is actually showing an ID. Some of the numbers were redacted on that ID, but the little I have seen told me what is going on,” he said.

Minister Motsoaledi pointed out that the unidentified man held a permanent residence ID. He sought to explain the different IDs issued by the Department of Home Affairs.

“You will remember that there are three types of IDs that are issued in South Africa. The first one is for South Africans and we will see it by the first six numbers as the date of birth.

“[The next four digits] denotes gender, which will be demonstrated by zero up to four for females and for males being five to nine. Then the last three numbers denote nationality. They end 08 something from one up to nine. Those are South African IDs that entitle you to vote.

“The second type of an ID is for permanent residents meaning the person was given permanent resident status but is still a citizen of another country and the ID we gave them is exactly like the South African ID except that at the end the last three numbers denoting nationality will end with a 18 something or 19 something. That one does not entitle anyone to vote,” Minister Motsoaledi continued.

The Minister added: “There’s no way that any other person will vote when they are not entitled. Voting in Zimbabwe means he is a citizen of Zimbabwe and there’s no way he can vote in South Africa.” (Credit: citizen.co.za)

Mr Tommy Makhode (Director-General at the DHA) indicated that Mr Gordan Hollamby (Chief Financial Officer at the DHA) would present the department’s 2024/25 financial year budget.

DHA Budget 2024-25

Mr Hollamby informed the Committee that the Medium-Term Budget Policy Statement announced reductions for the DHA amounting to R833 million in 2024-25, R891 million in 2025-2026, and R917 million in 2026-2027. However, in its preliminary allocation letter sent on 1 February 2024, National Treasury revised the budget cut for the IEC from R280.366 million to R30.4 million. As such, the baseline reductions were revised to R583 million in 2024-2025, R891 million in 2025-2026, and R917 million in 2026-2027.

In another allocation letter, National Treasury made further adjustments, an increase in the compensation of employees (COE) baseline over the medium-term expenditure framework (MTEF), and a reversal of the budget cuts for the BMA.

Also in that allocation letter the National Treasury indicated that it would not allocate more funding to the department for its Digitisation Project than the R809 million provided during the 2023-2024 in the next two financial years. The department is currently involved in discussions with the National Treasury to find a solution to this.

(See Presentation)

After the presentation, Ms Love requested that the Committee allow for the IEC to present on the election timetable.

The Chairperson acceded to the request.

IEC briefing on the election timetable

Mr Masego Sheburi (Deputy Chief Electoral Officer at the IEC) pointed out that Section 20 of the Electoral Act provides for the Commission to publish a timetable following consultation with parties represented in the National Assembly and provincial legislatures. After the President’s proclamation of the election date on 23 February 2024, the IEC held consultations with the National Political Liaison Committee. A timetable to guide preparations for the elections was then released.

The purpose of the timetable is to avoid ad-hoc decisions being taken relating to contestants and voters during the heightened period of election preparations. This is the longest timetable released by the IEC for the National and Provincial elections, as it provides 96 days to prepare. There were two reasons for the longer time period. First, is to have a period of inspection of the roll so that people or interested parties may raise objections against the inclusion or exclusion of certain persons on segments of the roll. Second, is to accommodate a ballot production period that will assist the IEC in dealing with complicated ballot papers.

Currently, the provincial voters' roll is now available for inspections at the IEC offices. Interested persons have until 4 March to raise objections on the voters’ roll. Following the objections period to the roll, the Chief Electoral Officer will, on 12 March, certify the voters' roll which will be used for the elections. Thus the IEC will have a short period to inform parties and independents whether their nomination documents are non-compliant.

Candidate nominations will remain open until 8 March at 17:00, which will require parties to submit a list of candidates, pay a deposit, and if it is an unrepresented party it must submit signatures of voters that support its participation. If a party or candidate fails to fulfil these requirements they will be unable to participate in the election.

The Commission must, by 22 March, inform all parties if there is a candidate who appears on separate party lists, and request the list be re-ordered by 25 March. However, if a party does not exercise an election or notify the IEC within that period the candidate will be left on its list.

On 26 and 27 of March, the Commission will avail the lists and names of all persons who have been nominated by parties and who are standing as independent candidates to facilitate objections to their candidature.

A person who is aware that they will be outside of their voting district on voting day may apply to the Chief Electoral Officer for a special vote. In addition, registered voters who, owing to illness or old age, may apply for a special vote. Voters will have from 12 March to 17 May to notify the Chief Electoral Officer.

The Electoral Act specifies that South Africans voting abroad can only do so at a high commission, embassy, or consulate. In 2021 the law was amended to make it easier for South Africans abroad to access special voting.

In addition, he pointed out that the Constitutional Court released a judgement the previous day on the application from Rivonia Circle to extend an order granted for independent candidates to only require a minimum of 1000 signatures to contest the election. The majority judgement ruled it not be in the interest of justice to hear the application on an urgent basis in circumstances when an election is imminent.

See Gazette

See Timetable

IEC Budget 2024-25

Ms Andile Mbatha (Chief Financial Officer at IEC) took the Committee through the presentation.

The revised baseline for 2024-2025 amounted to R2.3 billion, which will be allocated as follows: R911.6 million for administration, R1.29 billion for electoral operations, R236.9 million for outreach, and R25 million for outreach. However, electoral operations are not currently fully funded and will be funded through retained surpluses from 2023-2024.

Costs towards electoral operations have increased due to the introduction of a third ballot paper to cater for the regional ballot paper to be contested by political parties and independent candidates. This increase in the number of ballots to be printed requires the IEC to employ more staff to count the ballots before the election results are announced.

The budget cut of R607.2 million across the 2025-2026 and 2026-2027 financial years has resulted in the Local Government Elections (LGE) not being fully funded. Moreover, the budget allocation for the Represented Political Parties’ Fund has been cut by R44 million for 2024-2025.

(See Presentation)

Discussion

Mr A Roos (DA) asked when the department planned to present its recommended names for the ERCP, given the time limitations.

He was pleased by the reversal of budget cuts for the BMA as border security has been severely underfunded. He asked if the department was involved in discussions with the National Treasury regarding the gap between the BMA’s new and old budget.

Thereafter, he asked how the department would be able to fill its vacancies from the 2027-2028 financial year.

Regarding the digitisation project, he asked for a progress update on the scanning of documents and when the department anticipated completing the project.

On 10 October 2023, the Director-General (DG) confirmed that the Minister had approved the project for South Africans born abroad and naturalised citizens to receive smart IDs with immediate effect. He asked if the project would be completed by the end of the financial year. If not, he wondered whether there was funding allocated for it in the 2024-25 financial year, and when it would be finalised.

He was concerned by the IEC’s admission that the 2026 LGE was not funded and asked if there were any discussions on how it would be. In addition, he asked if the allocation for the procurement of the new head office was impacted by the budget cuts.

Touching on the election timetable, he asked why honorary consulates were not included as voting stations.

Mr B Pillay (ANC) asked the DHA what the critical vacancies it had budgeted for were and what the timeframe for filling the posts was. More particularly, he asked when the department anticipated filling the Deputy DG for Immigration, given its importance.

He too appreciated the reversal of the budget cuts to the BMA. This decision, he continued, fell in line with the Committee’s concern that the BMA could not function optimally without the required funds.

However, he was concerned by the decision to cut the IEC’s budget this financial year, especially during a vital election year like this one, which will see independent candidates contesting for the first time. He felt that provision should have been made for additional funding.

He appealed to the department to finalise its recommended names for the ECRP in the next week or two.

Mr Y Tetyana (EFF) expressed concern regarding the application process for Section 24A notices, especially those needing to vote in a separate province. He felt that the decision had to be implemented gradually to allow for voters to exercise their rights, and asked the IEC if there were alternatives.

Ms Love, on the concerns raised regarding the Section 24A Notice application process, indicated that this was a provision already in the law and only required one to provide notice of which voting district they will be voting on the day of the election. In addition, voters have been given enough time, up until 17 May, to submit their application and receive the decision.

Ms Akhtari Henning (Deputy Chief Electoral Officer: Corporate Services at the IEC), on whether the allocation for the procurement of the new head office was impacted by the budget cuts, outlined that the IEC procured and engaged with the National Treasury to assist it with the development of the specifications – these are currently being evaluated and assessed by the specifications committee, which includes engineers, conveyancers and land environmental survey specialists.

Ms Mbatha added that the budget allocated formed part of the retention of surplus and will be considered for approval on 31 July once the IEC submits its annual financial statements to the National Treasury.

Touching on the concern raised regarding the lack of funding for the 2026 LGE, she highlighted that the IEC received communication of the additional cuts in January. Discussions are currently underway with the National Treasury on how best to manage the budget cuts and funding the shortfall for the LGE.

Mr Sheburi, in response to the question of why honorary consulates were not included as voting stations, clarified that the IEC did not determine the facilities to be used as voting stations overseas, which is covered in Section 33 of the Electoral Act. There is currently a case in front of the courts relating to the use of honorary consulates, however, he could not get into details until the matter was finalised.

If an individual provides a pre-notification to the IEC on their intention to vote through Section 24A they will still receive the three ballots if they remain in their province. However, as provinces are constituencies any voter who votes outside of their province will only be entitled to a compensatory national ballot.

Minister Motsoaledi said that members of the Justice cluster, particularly the Department of Police, raised the issue of voting through Section 24A, and called for the new amendment to be relaxed. The law, he explained, was implemented because in the 2021 elections, certain individuals claimed to have voted more than once in different voting districts.

Regarding the ERCP, he hoped that the department would be ready to present its recommended names for the Panel by next week to the Committee. 

Referring to the questions related to the BMA, he requested that these questions be addressed to the BMA rather than the department as it is a stand-alone agency.

On the digitisation project, he hoped that the matter could be resolved by the National Treasury so that the project is not disrupted.

Mr Makhode, on what the critical vacancies it had budgeted for and what the timeframe in filling the posts was, stated in an effort to ensure its civic services are staffed the department’s first priority is to employ staff for the mobile trucks, immigration, support functions such as information systems, and legal services.

Touching on the rollout of smart ID cards to naturalised citizens, he told Members that the department did send out letters inviting naturalised citizens to begin visiting its offices. It hoped to complete the project within the next 6 to 8 months.

The Committee was informed that the R400 million the department is set to receive during the 2024-2025 financial year for COE is a recurring budget item. Therefore, it will be allocated to the baseline.

Ms Love asked if the IEC could be excused from the meeting.

The Chairperson permitted it to do so. Afterward, he invited the BMA Commissioner of the BMA for his opening remarks.

BMA Budget 2024-25

Dr Michael Masiapato (Commissioner and CEO of the Border Management Authority) indicated that the BMA appointed a permanent Chief Financial Officer, Ms Zamachonco Chonco on 1 November 2023.

Ms Chonco took the Committee through the presentation.

The BMA was formally established as an independent National Public Entity in terms of Schedule 3A of the Public Finance Management Act (PFMA) on 1 April 2023, and officially launched as the third armed service by the President on 5 October 2023.

The agency is currently funded from the budget transfers from these transferring departments: the Departments of Forestry, Fisheries and the Environment, Agriculture, Land Reform and Rural Development, Health, and DHA. In an attempt to address an envisaged deficit from the R1.34 billion transferred, the BMA applied to the National Treasury for an allocation of R2.9 billion in the 2024-2025 financial year, but it was only approved R250 million over the MTEF period. This was raised as a concern given the BMA’s mandate to secure the country’s borders.

Of the R1.34 billion transferred to the BMA for the 2024-2025 financial year, 72% (R963 million) is reserved for COE, and the remaining 28% (R377 million) for goods and services.

Dr Masiapoto indicated that from the R2.9 billion the BMA requested, only R250 million has been allocated for its operations. R300 million will be allocated in the following financial year, and R350 million for the 2025-2026 financial year. However, the BMA received a letter from the CFO of the DHA outlining its decision to reduce the allocated amount for 2024-2025 from R300 million to R131 million. After a series of engagements with the department, ultimately this decision was reversed and the R169 million returned.

In the current financial year, the BMA has been operating with the assistance of the department due to Section 197 Transition of the Labour Relations Act. This arrangement is set to end by 31 March 2024. At present, the BMA has a staff complement of 31. R150 million has been received from the Criminal Asset Recovery Account (CARA) to procure some of the tools of trade.

(See Presentation)

GPW Budget 2024-25

Ms Alinah Fosi (Chief Executive Officer of the GPW), Ms Constance Shibambo (Chief Audit Executive at the GPW) and Mr Ian van Der Merwe (Chief Financial Officer at the GPW) took the Committee through the presentation.

Members were informed that the GPW’s expenditure is projected to increase at an average annual rate of 15% from R1.5 billion in 2023-2024 to R2.3 billion in 2026-2027. The biggest expenditure item for the three financial years is COE, which will increase from R439.56 million in 2024-2025 to R582 million in 2026-2027. Revenue is expected to increase from R1.7 billion in 2023-2024 to R2.3 billion in 2026-2027. For these projections to hold the GPW will have to increase its tariffs for services rendered on behalf of the DHA from 1 April 2024.

The biggest revenue drivers are passports, sitting at R484.15 million, and IDs at R292.52 million. The cost per passport has reverted to the price before the discount, to R450-38, as has the cost per ID to R110-91.

Some of the capital expenditure items over the MTEF period are a new Enterprise Resource Planning (ERP) system, at a cost of R100 million, the refurbishment of the new headquarters building, at an estimated cost of R200 million, and the re-automation of the eGazette system. Since the 2017-2018 financial year the GPW has surrendered R1.79 billion in surpluses to the National Treasury.

(See Presentation)

Discussion

Mr Pillay stressed the importance of providing the BMA with enough funds to carry out its functions, and called for the Committee to support its plea in this regard.

In addition, he asked the GPW what the projected increase in tariffs would be in April.

Mr Roos noted that 86% of the BMA’s budget was allocated to wages, and asked why there had been an 8% wage increase to senior officials when an increase had been agreed to in the Public Sector Wage Agreement.

While he welcomed the reversal of the budget cuts to the BMA, he remained concerned by the underfunding of border security. When the BMA Bill was tabled before the National Assembly in March 2020, it was indicated that the agency would add R6.5 billion per annum to the border management costs and take 15 years to implement. However, only R1.4 billion has been allocated. He asked whether the 15-year plan would be extended or not.

On 3 May 2022 Members asked why the GPW had removed the balance sheet from its presentation and requested it be included going forward, but yet again it was not included in the briefing document. This sheet, he argued, was important as it showed whether the DHA utilised the GPW as a bank or not. He asked what the trade and other receivables and deferred income amounts were.

The GPW accumulated surpluses of 2 to 3%, but this stood at 10% before the Covid-19 pandemic. It seemed that the surpluses remained between 2 to 3%. Revenue has since increased from 1.5% in 2019 to 2% this financial year, but the costs of sales have doubled and capital expenditure tripled, whereas net profit has gone down from R528 million to R39 million. With this in mind, he wondered why the employee benefits had increased by 50% over the past 5 years.

Furthermore, the mid-term projections going forward illustrated a revenue increase of 17%, a head count increase of 21%, and wages by 32%. He asked what the reasoning behind the large wage increase was.

Between the 2019-2020 and 2025 financial years there is an increase of 19% per annum for professional services. He asked what these professional services were and why they had increased at a rapid rate.  He noted a sharp decline in professional services for the 2025-2026 financial year and asked if this was because the services were being insourced.

In addition, he asked why the employee benefits would increase by 24% between the 2025-2026 financial year.

In the previous year, the GPW told the Committee that it managed to save R50.03 per passport. Yet at the same time, the DHA doubled the cost of passports. He asked why the GPW thought the discount would be feasible, and why it had since changed its mind.

Thereafter, he asked if a socio-economic impact assessment on the Security Printers Bill (SPB) had been done.

Ms T Legwase (ANC) asked for clarity on why the GPW incurred duplicate supporting expenditure specified with different amounts within goods and services.

The Chairperson expressed Members’ concerns regarding the apparent lack of political will to ensure there is funding for the BMA, which they believed would have a negative impact on its operations.

Dr Masiapoto asked for the DHA and Committee to support the BMA in its quest to attain additional monies to fund its operations.

As the BMA was incubated in the DHA during the 2022-2023 financial year it was allocated R67 million for capacitance. Soon after the BMA had to complete its administrative work and integrate officials into its operations. The BMA asked for R2.9 billion in 2022 so that it could establish the organisation and pay the salaries of officials that were to be recruited.

Regarding the 8% salary increase for senior officials in the BMA, he explained that two directors were brought into the agency from the DHA and the DALRRD. The BMA had to fill statutory positions, such as the CEO, CFO, and assistant commissioners responsible for operations.

Interviews are underway to appoint a Chief Audit Executive and Chief Risk Officer by 1 April 2024. The 8% increase, he continued, related to the appointments of the CEO and CFO.

Touching on whether the BMA’s 15-year plan would be extended or not, he explained that originally the BMA was supposed to begin its 15-year plan from 2017 until 2032. At that period the BMA was looking at employing 9756 border guards, costing R3.2 billion per annum. However, due to certain things the entire business case and growth of the BMA had changed, forcing it to modify its prior plan.

Currently, 400 individuals are being trained as border guards, and are set to be employed full-time in the new financial year, bringing the total number to 600. Including the 2000 specialised functions and support staff, the total number of employees would be 2600, with the COE amounting to R1.4 billion. Moreover, the original plan looked at integrating the 6000 police officers exclusively working on border issues, but this did not occur, exacerbating the shortfall.

The Chairperson asked if the Minister could provide more detail on the planned integration of the 6000 police officers.

Ms Fosi confirmed that a socio-economic impact assessment on the SPB had been done, with the assistance of the DHA’s legal team. As part of the draft legislative process, the GPW will conduct another with the department. 

Mr van Der Merwe indicated that the agency’s balance sheet was available for Members.

On the GPW’s trade and other receivables, he pointed out that the agency has receivables amounting to R430 million, of which 40% remains for 180 days. As such, if it applied its impairment and debtors policy it had to provide for the write of the 40%. The agency is embarking on a process of collecting its debt from debtors.

The deferred income and retained earnings currently stand at R2.4 billion, and the agency has asked the National Treasury to keep this.

In response to the question on the surpluses, he indicated that the agency reduced the surpluses due to various reasons, such as the significant supply-input cost increases over the medium-term period, which, to some extent, has absorbed and passed on to customers.

Concerning the question of why the employee benefits had increased, he stated that the agency was currently re-capacitating itself after losing a lot of it in the past 5 years. As some of the skills were highly specialised and scarce the costs were higher. It has been difficult, for instance, to find suitable engineers.

Referring to the question on professional services, he explained that the knock-on effects of professional services are passed on to the maintenance of machinery and servicing ICT licences. The suppliers and maintenance agreements have increased over the last two to three years, impacting the professional services. The agency expected that this may decrease over the MTEF period, but would continue monitoring it on an annual basis.

On why the GPW thought the discount for passports would be feasible and why it had since changed its mind, he admitted that the GPW would have to look into this matter further.

Regarding whether the GPW what the projected increase of tariffs would be in April, he said the GPW expected a 5.5% increase over the MTEF period.

In response to the question on why the GPW incurred duplicate supporting expenditure specified with different amounts within goods and services, he clarified that there were direct costs which related to manufacturing and salaries that are reflected in the cost of sales basket.

He mentioned that the agency’s greatest financial risk is its cash flow.

Mr Pillay proposed that the GPW return and present its balance sheet to the Committee so that it can include the details in its legacy report.

Mr Roos supported Mr Pillay’s suggestion, and asked that the Committee receive a list of the agency’s debtors.

Mr Njabulo Nzuza (Deputy Minister of Home Affairs) said even though the Ministry and Committee agreed that the BMA required more funds to fulfil its mandate, both had to acknowledge the constraints on the fiscus. Nonetheless, the department will continue, with the support of Members, to lobby the National Treasury for additional funds.

Minister Motsoaledi highlighted that the BMA formed part of the Justice, Crime, Prevention and Security (JCPS) Cluster. Over the years, budget cuts have particularly targeted the JCPS Cluster, as is currently being seen in the BMA. However, recently both the President and Minister of Finance (MoF) sought to reverse this trend, and in fact, make up for the effects of previous cuts made.

In the meantime, the Criminal Assets Recovery Account (CARA) funding has been allocated to the BMA to allow it to buy tools of trade, and the department planned to lobby it for additional funding for this purpose. He was hopeful that the 15-year implementation plan for the BMA would be put back on track.

The Ministry, he admitted, was not pleased with the current arrangement wherein a portion of the DHA’s budget must be used to utilise the GPW’s services, and once used that money then is returned to the National Treasury from the Agency. Essentially, the GPW acts as a business for the National Treasury, he argued, and the department is currently engaging with the latter to resolve the matter.

Furthermore, the Ministry was not pleased that some government departments outsourced their printing services. Noting this, recently the President gave an instruction that all government printing must be done through the GPW. All that remained was for the CEO of the GPW and Director-General in the Presidency to finalise the logistics. Once that occurred, the GPW would become a viable entity, he stressed.

In response to the questions related to the discounts on passports, he informed Members that South Africa subsidised its passport more than any other country – confirmed by a benchmarking conducted by a service provider. Through this benchmark, the department developed new tariffs for how much members of the public should pay for a passport. In terms of the Act, this had to be done in consultation with the MoF. The tariffs were cut by half by the MoF, which he regarded as a serious anomaly and contradiction.

He reminded Members that the BMA was controlled by a group of 10 ministers, who have since established an inter-ministerial committee (IMC). Unlike other IMCs, the members of this particular IMC are selected by Parliament through an Act. He assured Members that he would put all of the concerns to the IMC going forward, and would inform them of any new developments.

Closing remarks by the Chairperson

The Chairperson appreciated the Minister’s commitment and assured him and the department that the Committee would continue to support the BMA in its efforts to obtain additional funding. Also, he was pleased by the President’s announcement.

Furthermore, the Committee, he continued, awaited the department’s presentation on the ECRP.

Members, he said, were pleased by the IEC’s presentation on the election timetable. Along with the Select Committee on Justice, the Committee may need to conduct an oversight visit, given the magnitude of the IEC’s work during this election period and the importance of ensuring the agency’s readiness.

The Committee may need to meet to analyse some of the issues relating to the GPW. Afterward, it will call the agency back for further discussions.

He thanked all the officials and Members for their input during the discussions.

The meeting was adjourned.