Committee Report on Tourism Budget

Tourism

18 May 2017
Chairperson: Ms B Ngcobo (ANC)
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Meeting Summary

The Committee met to deliberate on the National Department of Tourism (NDT) budget vote 33.

The Committee had observed that the 2015/16 and the 2016/17 Strategic Plans of the NDT had not met the (specific, measurable, achievable, relevant and time-bound) SMART principles. That had led to a number of predetermined objectives not being met. Further, the Committee noted that the Departmental internal audit had not identified potential risks that could lead to poor performance by the end of the financial year. There had also been a lack of focused approach to enterprise development and the Committee called for an incubator programme, especially for tour operators. 

Looking at recommendations, Members proposed the following:

-The Minister must ensure that the NDT engages National Treasury to explore prospects of appropriating additional budget to Vote 33 based on the restructuring that had been conducted by the NDT and the outcomes of the Marketing Investment Framework developed by South African Tourism.
-NDT should conduct a focused change management process to ensure that all staff members appreciate and own the new organisational structure to maximise efficiencies and avert any possible unintended consequences of labour disputes.
-South African Tourism should effect the required changes in the reporting time frames to meet both the financial year imperatives and the United Nations World Tourism Organisation standards, and that said changes had to be reflected in the SAT 2018/19 Annual Performance Plan.
-The NDT should work closely with other stakeholders to deal with exorbitant aviation taxes. The NDT and South African Tourism had to engage airlines to improve airlift for both the international and domestic markets to address geographic spread and increase arrivals, domestic trips and tourism revenue.
The draft budget vote report was not adopted.
 

Meeting report

Committee Report on Tourism Budget
The Chairperson tabled the document for consideration. Members were advised to look at the observations and recommendations contained in the document.

Observations
Mr J Vos (DA) said that it had been established through a number of stakeholder engagements, including the recent Local Government Tourism Conference held from 3 - 4 April 2017, that the National Department of Tourism (NDT) was not fulfilling its mandate due to financial constraints; particularly with regard to product development, maintenance of tourist attractions, and capacitating local government to perform its constitutional duties. The amount allocated to goods and services which were used for service delivery by the NDT had also been insufficient to fulfil its mandate.

The Chairperson said that the 2015/16 and the 2016/17 Strategic Plans of the NDT had not met the (specific, measurable, achievable, relevant and time-bound) SMART principles. That had led to a number of predetermined objectives not being met; also included were predetermined objectives whose achievements depended on other institutions but the NDT had not done adequate ground work and planning to ensure that the targets were attainable; and the Departmental internal audit had not identified potential risks that could lead to poor performance by the end of the financial year.

Mr T Rawula (EFF) said that though the NDT had improved on setting its predetermined objectives in the 2017/18 APP since some of the issues raised by the Committee had been addressed; the risk of delays in achieving quarterly targets remained as the NDT would still be implementing projects in partnership with a number of stakeholders. The Committee had to be vigilant in its oversight work from quarter 1 of the 2017/18 financial year to ensure that no delays would be incurred in achieving the quarterly and thus annual targets.
He also recommended that the NDT consolidate its training programmes as they were spread across all programmes and there was no focussed strategy in that regard.

Mr Vos recalled his concern about the lack of a focused approach to enterprise development and called for an incubator programme, especially for tour operators.  He had been pleased to see that all those concerns had been addressed in the new Departmental structure.

Mr G Krumbock (DA) noted that the organisational structuring has resulted in staff being moved across the Programmes. The number of chief directorates had remained the same and the restructuring has reduced the staff complement from 648 to 503. He was pleased that the NDT had created a Directorate that would focus on municipalities.

The Chairperson was pleased that the staff that had been based in provinces as Provincial Programme Managers would be moved to Pretoria and the process of fully incorporating them would be finalised by December 2017 to allow them to settle in Pretoria with their families. Additionally it was also comforting to note that the labour unions had been consulted and they had agreed to the new structure.

The policy and legislative considerations
Ms P Adams (ANC) recalled that in its 2016 Budget Review and Recommendations Report (BRRR), the Committee had recommended that the Department had to revise the White Paper on the Development and Promotion of Tourism in South Africa to address the national transformation imperatives and contemporary global and national trends in the sector. That was important as the NDT had to provide strategic and policy responses for the sector. Said responses had to be reflected in the manner the NDT aligned and continuously capacitated its human resources; and put in place structures and processes to deal with the dynamism of the tourism sector. The tabled NDT Annual Performance Plan had not addressed all the immediate challenges. Chief amongst those, had been the disturbances caused by the sharing economy, such as Uber and Airbnb.

Mr Krumbock said that the NDT had to ensure quality assurance of tourism product offerings and tourist experiences through conducting a policy review of the grading scheme as the Committee had observed in its various oversight work and through engagements with the Tourism Grading Council of South Africa (TGCSA) and the private sector, which the grading scheme had been failing in its current form.

Ms Adams said that The Blue Flag Programme implemented by the NDT was a collaborative work amongst stakeholders such as municipalities, provinces and the Department of Environmental Affairs (DEA) and had to be rolled out to more coastal municipalities.

Departmental oversight over South African Tourism
Mr Vos commented that despite the work done by the Board of South African Tourism (SAT), he had observed that the entity had not always complied with the guidelines for preparing the Strategic Plans and Annual Performance Plans (APP). He had previously raised concerns about the manner in which SAT reported against their Strategic Plans and Annual Performance Plans. That led to the Auditor-General of South Africa intervening in that regard.

Committee observations with regard to South African Tourism
Focus for the Enhanced Strategy for Growth
The Chairperson noted that the 5-in-5 strategy would address a wide array of the concerns that had always been made around the bias of South African Tourism towards international tourism. She was however, concerned about the conservative targets on domestic tourism. The measures taken to address seasonality, limited geographic spread and affordability would assist in unlocking the tourism potential. The insights from the study conducted by SAT had revealed that affordability, access, and culture were barriers to the increase of domestic tourism in South Africa.

Recommendations
Mr Vos recommended that the Minister ensures that the NDT engages National Treasury to explore prospects of appropriating additional budget to Vote 33 based on the restructuring that had been conducted by the NDT and the outcomes of the Marketing Investment Framework developed by South African Tourism. In addition, he recommended that the NDT conducts a focused change management process to ensure that all staff members appreciate and own the new organisational structure to maximise efficiencies and avert any possible unintended consequences of labour disputes.

Ms Adams recommended that SAT had to effect the required changes in the reporting time frames to meet both the financial year imperatives and the United Nations World Tourism Organisation standards, and that said changes had to be reflected in the SAT 2018/19 Annual Performance Plan.

The Chairperson said that the NDT had to work closely with other stakeholders to deal with exorbitant aviation taxes. The NDT and South African Tourism had to engage airlines to improve airlift for both the international and domestic markets to address geographic spread and increase arrivals, domestic trips and tourism revenue.

She then thanked the members for their inputs and said the final version of the draft budget vote report would be circulated to Members so that the following day the Committee could vote on the NDT budget.

The meeting was then adjourned.
 

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