Speaker, hon members, hon colleagues from the Finance family, hon Deputy Minister of Finance, ladies and gentlemen, the Minister of Finance indicated in his Budget Speech that the 2013 Budget takes the National Development Plan, NDP, as its point of departure. As the ANC, we welcome that statement as the core element of the National Development Plan, which contains many elements of the five priorities of this democratic government.
The National Development Plan opens with a quotation from the Reconstruction and Development Programme, RDP, which states:
No political democracy can survive and flourish if the mass of our people remains in poverty, without land, without their basic needs being met and without tangible prospects for a better life. Attacking poverty and deprivation will therefore be the first priority of the democratic government.
The NDP defines the core elements of decent living standards as, amongst others, housing, water, electricity and sanitation, quality education and skills development, quality health care, safe and reliable transport, safety and security, social protection, job creation and leisure, clean environment and adequate nutrition.
Let us see how this Division of Revenue Bill addresses these issues. My input will focus on the following areas, namely local government equitable share, human settlement, Expanded Public Works Programme, and education.
As regards local government, the Bill deals with the reform of the budget, recognising differences in our municipalities in terms of socioeconomic profile by directing the allocation to the poorest municipalities without unduly punishing the relatively well-off municipalities.
The new formula makes provision for 52% of allocations to be directed to a basic services component benefitting both metropolitan and rural municipalities, where the majority of people live. This formula is designed to ensure that each municipality, including the rural municipalities, have enough resources to provide for basic services to each poor household.
The SA Local Government Association did not support the grant as they felt it would increase the burden of accounting because of the proliferation of grants that municipalities are required to report on. The meeting, however, resolved that Salga should be consulted in order to solicit their support.
The Department of Human Settlements administers a number of grants, including the urban settlement development grant and the rural household infrastructure grant, amongst others. These interventions are intended to improve the lives of the poor in urban and rural areas.
The urban settlement development grant is a relatively new grant whose purpose is to assist the metros to improve urban land production and focus on poor households so as to improve spatial integration and density. It also supplements capital revenues in order to support human settlement development programmes such as the laying of bulk infrastructure. The grant is intended to address the challenges of informal settlements. However, its performance remains a challenge.
Lastly, as regards human settlements, I will deal with the rural household infrastructure grant, which is a big challenge as the grant was originally with the Department of Water and Environmental Affairs and was moved to the Department of Human Settlements late in 2010. The purpose of this grant is to ensure that rural communities have access to sanitation. This Bill changes it to become a Schedule 5b grant - a Schedule 5b grant is a specific purpose grant - instead of making it a Schedule 6b grant, which is a grant-in-kind that would continue to be administered by the Department of Human Settlements.
The new arrangement gives the responsibility to the municipalities. The committee would recommend that the Department of Human Settlements, National Treasury and Salga work out a solution to report to Parliament about the measures they would take in building capacity at local level. However, in terms of the Constitution, we are aware that sanitation is a local government responsibility. This government continues to ensure that access to education is improved by, amongst others, eradicating mud and inappropriate structures, the majority of which are in the Eastern Cape.
The President announced that out of the first 49 schools, 40 beautiful schools would be ready for occupation by the end of March. The Standing committee on Appropriations has witnessed the schools that have changed the rural landscape in the Eastern Cape areas. The programme started a bit slow, but now it is in full swing because of the persistent oversight by Parliament. The provinces also build schools from their education infrastructure grants. We therefore commend the government for the aggressive way it has taken to address the shortage of space in schools.
There are still challenges in terms of accelerating capital expenditure within the provinces. The programme has surely created thousands of quality jobs and professional skills have emerged as a result of this infrastructure programme. It has also created access roads to these schools. The national government is opening up more learning opportunities to the children of South Africa, whilst the Western Cape is closing schools in poor communities. Luckily, these communities are not going to allow the closure of their schools. The government is creating short-term jobs through the Expanded Public Works Programme, incentive funding and community works programme. Over 200 000 work opportunities were created in the 2011-12 financial year, excluding the work created in the social cluster. Provinces can play an important role in this area, as evidenced by the Department of Transport in the KwaZulu-Natal province.
The conditional grants are an extremely important instrument to ensure that national priorities are achieved. However, we need to avoid creating many short-term conditional grants. The Financial and Fiscal Commission did a lifespan analysis on the conditional grants over 12 years, starting from the 2001-2002 financial year. It found that the practice may create volatility and make the task of planning administration difficult and, in many cases, affect the grant spending.
The Bill, for the first time, directs resources to be spent on specific cases, such as direct budgets for maintenance and damaged infrastructure in education or in human settlements. For instance, it has allocated money to complete priority projects in areas like Mdantsane in the Eastern Cape; Khutsong, Lufhereng, Diepsloot and Sweetwaters in Gauteng; Cornubia in KwaZulu-Natal; Lephalale in Limpopo and Drommedaris in the Western Cape.
The Department of Human Settlements has allocated funds to six metros to build houses in the event they are accredited. The metros are at different stages of accreditation. Some are ready for level three so that they can deliver houses directly once the provinces are convinced that those metros have developed sufficient capacity to deliver houses. This is a step in the right direction as the process will accelerate the delivery of houses and the creation of bulk infrastructure.
The government wants to distribute more additional resources to poorer municipalities. National government and provinces have a duty to create the necessary capacity and lend the necessary support to municipalities. Structures such as the Municipal Infrastructure Support Agency should go a long way in supporting municipalities. To many poor and rich, progressive people of South Africa, the government, with the support of Parliament, is definitely on track on meeting the needs of our people. The positive thing is that where officials or officers tarnish the image of our government, government acts decisively.
The ANC is on track with delivery regarding the living standards mentioned in the National Development Plan. The ANC will support the Bill. I thank you. [Applause.]
Chairperson, the 2013-14 Division of Revenue Bill allows for a budget allocation of R413,1 billion to national departments, R388,5 billion to provinces and R77 billion to local governments.
Alignment of the Budget itself to achieve its goals set out in the National Development Plan and the greater emphasis on infrastructure development and expenditure is welcomed, although the Congress of South African Trade Unions, Cosatu, is against this.
As we know, service delivery mainly takes place at local government level, and the increased allocation to local government over the Medium-Term Expenditure Framework, MTEF, period from 8,9% this year to 9,2% of the Budget in 2015-16 is a step in the right direction. The municipal infrastructure grant, which is estimated to be R13,882 billion this year, increases to R15,448 billion in the 2015-16 financial year.
I welcome the new grant, the municipal water infrastructure grant, which receives an allocation of R603 million in the 2013-14 financial year, increasing to R2,672 billion in the 2015-16 financial year. This new grant will be administered by the Department of Water Affairs and will go to 24 district municipalities. The Department of Water Affairs unfortunately has a history of seriously underspending their budgets, and close monitoring of expenditure by National Treasury will be required. Regrettably, the grant makes no specific provision for improvements to sanitation, an area where serious backlogs still exist.
The ability of local government to actually spend the increased funds allocated to them in the Division of Revenue Bill is unfortunately also questionable. This is particularly true of rural municipalities, where 56% of such rural municipalities that received equitable share allocations obtained a disclaimer from the Auditor-General. The Financial and Fiscal Commission, in their comments about the new equitable share formula which will distribute additional resources to poorer rural municipalities as per the Division of Revenue Bill before us today, expresses grave concerns about the ability of these poorer municipalities to actually spend the funds, unless there is serious intervention and assistance by national and provincial governments.
In a local government Budget analysis report to Parliament it is found that the ability of local governments to spend their approved budgets had deteriorated by 25,6% in the 2011-12 financial year when compared to the previous financial year. A total of 166 out of a total of 286 municipalities underspent against their total adjusted budgets by more than 15%. The report also found that a large number of municipalities that underspent against their budgets in fact had no cash in the bank equivalent to the level of underspending reported by them, which means that they did not accumulate funds in the bank because of the underspending, but that their budgets were simply unfunded.
Of particular importance is the ability of municipalities to spend their capital budgets as well as conditional grants as it is in these two areas where service delivery and job creation and infrastructure development take place. Unfortunately, municipalities generally failed dismally in this respect as well.
In aggregate municipalities underspent on their adjusted capital budgets for 2011-12 by 32,3%. Municipalities in Mpumalanga fared particularly poorly and collectively underspent on their capital budgets by 54,4%. In terms of rand value the lowest underspending of capital budgets occurred in North West and the Western Cape, of course. When considering the country as a whole, 203 of the 286 municipalities underspent against their adjusted capital budgets by more than 15% and 82 of these municipalities underspent by more than 50%.
In respect of conditional grants, total underspending against amounts transferred to municipalities in respect of the 2011-12 financial year amounted to R5,1 billion or 25,4% of funds transferred. One hundred and sixty-one of the 286 municipalities countrywide underspent on conditional grants, with 125 of them underspending by more than 15%.
In respect of municipal infrastructure grants, municipalities on aggregate underspent by 15,8% during the 2011-12 financial year. A large proportion of municipal infrastructure grants have now also been moved to the municipal water infrastructure grant to be administered by the Department of Water Affairs which, as I have said, is likely to lead to a deteriorating spending pattern, given the spending history of the Department of Water Affairs.
Whilst the proposed increases in allocations to municipalities are therefore generally welcomed, there is serious concern about the ability of municipalities to actually expend the funds allocated. If we want to redress the injustice of the past, promote service delivery, reduce infrastructure backlogs and create jobs serious attention will have to be given to improving the capacity of municipalities by way of interventions by national and provincial government. The question is whether government is serious about improved planning, better oversight and better management for local government. The current track record seems to suggest the opposite.
The Bill before us tells us where our taxes are going. There is often an outcry for heavier taxation from certain quarters such as Cosatu. We should, however, continuously strive to raise taxes wisely and use the revenue raised effectively. The wise words of Winston Churchill therefore come to mind when he said, and I quote:
For a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.
I thank you.
House Chairperson, I follow my colleagues in the Appropriations committee to offer my comments and concerns. Fourteen days ago, the Minister of Finance tabled the Budget and projected slow growth with challenges that would require strong management of these resources.
Today the committee tables its report for adoption, following the adoption of the fiscal policy. I need to say from the outset that our committee's capacity remains unchanged but, at least, there is light at the end of the tunnel because the Speaker and the NCOP Chairperson have announced and confirmed the imminent appointment of the Budget Office staff as well as the director.
The Bill allocates 47,6% to national government, 43,5% to provincial government, and 8,9% to local government. Every day when we speak about resources and budget allocations to these three spheres of government, negativity crosses our minds. We think of less honest officials who wait for the approval of the budget allocation with which to do business in their departments. We worry about the corruption and fraud committed by officials entrusted with the public purse. Indeed, we think about what was said by Michela Wrong in the book entitled It's our Turn to Eat.
Notwithstanding the reasonable challenge in the changes suggested in the Bill, Cope in principle supports this Bill but would like to highlight a few points. Efficiency, discipline, sound financial administration and accountability are at the centre of the success of this Bill. Cope underwrites the importance and the role of the Division of Revenue Act, Dora, which sets a fiscal environment and provides for equitable division of revenue between the three spheres of government. We acknowledge that such division of revenue depends on urgent needs as reflected in the division of priorities from allocations based on national government's resources.
Deputy Minister, you have the difficult task of designing the regulation and attempting to stop the looters from looting public resources. This, however, is directly linked to human behaviour, effective management, transparency and accountability, which all reflect an organisational discipline, accountable financial ethos and departmental officials who are timeously accountable in implementing the resources. We worry when the provincial government fails to apprehend these looters. In some cases even the premiers are suspected of wrongdoing.
It perturbs Cope greatly when the Premier of the Free State misuses public resources for software tenders for self-benefit. It is a great concern, for example, when a Free State provincial treasurer utilises the conditional grant meant for health infrastructure for something else, which it was not originally intended for. The question we need to ask is: Why does national government not act against this premier or any other official who abuses state power to benefit them? House Chair, if action is not taken it will be a clear signal that we support wrongdoers.
The value for money expenditure is of concern to Cope. Dumping of the resources at the end of the financial year is even more worrying; at the end of the fourth quarter you see the dumping of resources by officials in terms of expenditure. We are worried when R102 billion was spent on consultants when the state employed 1,2 million public servants. Surely they should have the capacity to do this work. If you look at this expenditure of R102 billion, the government could have built 2,1 million houses if each house cost R50 000.
House Chair, we, as the committee, are worried, particularly when we look at the constraints that are imposed by the money Bill. Today, as we want to amend the money Bill, we are confronted by the time that we wish to give to the Minister for consultation. We worry whether this is not a booby trap set to highlight Parliament's inability to raise or to amend the money Bill. We want to register our concern that the national departments are failing to provide hands-on assistance to municipalities in order for them to perform their functions. We call on senior management and senior personnel to ensure that these functions, as provided for in the Act, are performed. Cope supports the Bill. [Applause.] [Time expired.]
Chairperson, as we have heard, the Division of Revenue Bill determines the equitable division of nationally raised revenue among the three spheres of government. Now, whilst that may be so, the biggest challenge that we have in government is underspending and the inefficient use of available resources. This is why I agreed with the National Treasury when they came to our committee and said that they emphasised the need to prioritise the attainment of efficiencies in resource allocation to strengthen delivery. If we look at all the service delivery protests that are taking place around the country, and if we look at the fact that many provincial departments are still under administration by National Treasury and national government, hon Deputy Minister, this is cause for concern.
I want to submit that South Africa is awash with money. It is like an ATM for the departments, but they are not using that money properly. This is due to the reasons that hon Ramatlakane mentioned, namely corruption, misuse, mismanagement, use of consultants and so on and so forth.
It is a pity that we couldn't propose any amendments to this Bill. That was due to the tight timeframes that are contained in the Money Bills Amendment Procedure and Related Matters Act. Hopefully as that Act is reviewed and amended, it will allow us as parliamentarians more time to interrogate the budgets that come through from Treasury. To a large extent, this is still a budget presented by Treasury, on which we in Parliament can make a few comments and at the end of the day adopt.
However, when we look at the new Money Bills Amendment Procedure and Related Matters Act, and at the National Development Plan, NDP, and the future vision of the NDP, one will have to admit that there needs to be a whole review of the cycle that Treasury uses in determining budgets. Members of Parliament need to get involved at a much earlier stage if we are to make meaningful comments.
When we talk about underspending and prioritising, a case in point is the rural housing infrastructure grant. Rural development has been identified as one of the country's major priorities. I agree with that; in fact, we all agree with that. But is this just lip service? There is a lot of money that has been allocated to this function. At first it was given to the Department of Water and Environmental Affairs in 2007, then it was moved to the Department of Human Settlements in 2009. There was massive underspending, and now we want to move it directly to municipalities. Is that going to solve the problem?
Having said that, one of the amendments that we would have liked to propose is that it should not have been moved from Schedule 6(b) to 5(b); this should not have been a direct grant. We still feel it is necessary for the national department to oversee spending in the municipalities. It becomes one big merry-go-round when you start shifting responsibilities for the spending of funds. I think Treasury needs to look at this. In the case of the municipal water infrastructure grant, which is a new grant, the responsibility resides with the Department of Water Affairs nationally, but in the case of the rural housing infrastructure grant it's with the municipalities. One can't understand what informs this kind of thinking where one function is handled by a national department and the other by a municipality.
There is a similar problem regarding the programmes of the municipal water infrastructure grant, with R4,3 billion over three years. The problem is that when we asked for a breakdown of how that money was going to be spent, over R400 million was not accounted for, and when we asked what it was for they said that 10% was, the management fee. What is this management fee? Are we going back to the old mindset of consultants? We should not have such large management fees, because these projects should be managed by public servants. We will support the Bill. [Time expired.]
Chairperson, hon members, the Division of Revenue Bill provides the first step in the process of service delivery, and by tabling this Bill the Minister complies with the Constitution of the Republic.
It is essential that a large proportion of the revenue should be channelled towards the provinces and municipalities in particular, as these two tiers of government are, by virtue of their proximity, supposedly better placed to deliver services. In addition, a large number of our municipalities, especially in rural areas, have a limited revenue-raising capacity and yet they provide a number of basic services free of charge. In this regard, we are pleased to see that transfers to the local government level have grown significantly over the years.
However, we wish to draw your attention to a few problematic aspects of the division of revenue. The first aspect is the failure of the provincial and local government spheres to spend the additional funding in such a way that it reaches the intended beneficiaries. The second aspect is the inadequacy of funding in instances where it does reach the intended beneficiaries.
I am fully cognisant of the fact that none of us in this House is in a position to give answers to these problematic aspects I have just raised. However, as my colleagues who were on this podium before me have alluded, the fact remains that we have no guarantee that this division of revenue is going to improve the lives of the intended beneficiaries.
This undesirable state of affairs has its roots in the lack of capacity and managerial skills at provincial and local government levels, coupled with the endless infighting in some municipalities. Furthermore, co-ordination and policy integration among the various levels of government is virtually nonexistent. This convoluted bureaucracy between the national level and the coalface of delivery has various leaks, backlogs and linkages that divert resources away from the intended beneficiaries.
Violent protests across the country concerning the failures in basic service delivery sufficiently make this the truth. We have to overhaul bureaucracies, unlock the backlogs and fix the leaks that prevent resources from translating into service delivery and value for money for the taxpayers. The UDM supports the Bill. I thank you.
Hon Chairperson, hon Deputy Minister Nene, Members of Parliament, there is a unity in purpose that we must embrace as members of this House. At this stage of our democracy we must weigh up the effect of cheap politicking and, in the process, a fragmenting society against the noble ideals of creating a nonsexist, non racial, democratic South Africa - the principle contained in the National Development Plan.
It is our collective responsibility to, firstly, embrace and effect the socioeconomic principles contained in the plan. In this, we do not mean that opposition parties should be relegated to a position to applaud all that government does in the interests of the citizen to rectify the injustices of the past.
The vision of the ANC rests on the Freedom Charter's call that the people shall share in the country's wealth. The national wealth of our country and the heritage of South Africans shall be restored to the people. The 2013 Division of Revenue Bill bears testimony to this statement.
My focus point will demonstrate this in two particular areas of the division of revenue, namely Agriculture, Forestry and Fisheries, and Rural Development and Land Reform.
Closely linked to the National Development Plan is public sector infrastructure spending which, together with industrialisation, are the main drivers of job creation and economic growth. A considerable budget of R827,1 billion is set aside for infrastructure spending over the Medium- Term Expenditure Framework, MTEF, period. Of this budget, national departments receive R39,6 billion, provinces receive R147,7 billion and local government receives R150,6 billion.
The ANC's 53rd national conference outlined this when it stated that large public investments in energy, ports, railways and roads would help to alleviate supply bottlenecks in the economy, while social infrastructure would improve the conditions of our people.
The following programmes of the Department of Agriculture, Forestry and Fisheries receive significant financial allocations. A budget amounting to R1,6 billion is allocated to the comprehensive agriculture support programme grant in 2013-14 and it is expected to increase to R1,7 billion by 2015-16. This is a clear commitment by this government, in their ongoing efforts, incrementally to support small-scale farmers.
In the 2011-12 financial year alone, this grant has fundamentally contributed to the social transformation of our society and our people. [Interjections.] I think you, on this side of the House, must listen.
Why do we have to listen?
If you are interested, you will listen.
This comprehensive agricultural support programme has supported 36 504 beneficiaries - it's nothing for you, but it is a lot for us; created 6 303 jobs; trained 16 181 farmers in targeted training programmes; recruited 95 extension officers nationally; and registered 828 extension officers for qualification upgrading. If this is nothing, what is nothing?
There is no doubt that, through this financial commitment, the ANC government will be able to achieve the following outcomes of this grant: broadened access to agricultural support for subsistence, smallholder and previously disadvantaged commercial farmers; the creation of markets for beneficiaries; and improved knowledge of and information on farming by beneficiaries.
The Illima/Letsema projects grant is at the heart of poverty alleviation through food production. The purpose of the grant is to assist vulnerable South African farming communities to achieve an increase in agricultural production and invest in infrastructure that unlocks agricultural production. The 2013 Division of Revenue Bill makes available the massive budget of R438 million in this financial year. This budget increases to R461 million in the 2014-15 financial year and to R482 million in the 2015- 16 financial year. Indeed, this is a progressive commitment.
In terms of service delivery performance, this project has achieved the following: created 8 698 jobs; supported 110 000 beneficiaries; supported 87 889 households; managed to plant 86 000 hectares of land; and produced 371 000 tons of maize. Now, that is commitment. Of cause, there is room for progress. We will address this. The purpose of the land care programme grant is to promote sustainable development and the use of natural resources by engaging in the initiatives that support the pillars of sustainability.
The Division of Revenue Bill makes available a budget of R109 million in this financial year. At the end of the 2011-12 financial year this programme managed to score the following fundamental achievements: 2 018 work opportunities created in land care projects; 16 276 hectares of land on which alien invasive plants were eradicated; more than 3 000 hectares of grazing area improved; 153 wetlands protected; 34 water sources developed and more than 15 000 hectares of land improved in all nine provinces. With the current allocations, we will continue to build on these successes.
The budget allocated to the Department of Rural Development and Land Reform responds to the following ANC declaration in Mangaung: "The state must mobilise resources to reverse both the human and material conditions of those displaced by previous land policies." The ANC welcomes the R9,5 billion allocated to the Department of Rural Development and Land Reform. We are confident that this budget will improve the implementation of the following key programmes: rural development, restitution and land reform. [Interjections.] I will come to you.
Ek gaan u nou antwoord. [I am going to reply to you just now.]
I am proud to say that this budget heeds the ANC's call that says:
Transformation imperatives dealing with the triple challenge of poverty, unemployment and inequality in the rural areas ought to be addressed without further delay.
Die afgelope tyd merk ek op dat hier sekere lede in opposisiegeledere is wat 'n boodskap van bitterheid, swaarmoedigheid en swartgalligheid uitstraal. Dit is baie jammer, want ons kry wel eensgesindheid oor die Begroting, maar sommige lede kan nog nie vrede maak daarmee dat Suid-Afrika getransformeer het nie. Dis jammer, want dis tyd dat hulle daarmee vrede maak, anders gaan hulle, wanneer hulle saans om die etenstafel sit of vleis braai, baie swaar aan die vleis eet of die aandete baie onsmaaklik vind.
Dis tyd dat sekere elemente in opposisiepartye, en daar is baie van hulle wat positief in ons komitee saamwerk, met die volgehoue negatiwiteit ophou. Dis tyd dat ons positief begin dink, hande vat en saamstaan om di mooi land van ons verder uit te bou sodat ons die armstes van die armes kan dien en hulle 'n beter lewe kan verseker.
Die program bestaan en alle komiteelede kan 'n baie duideliker, deegliker moniterende en oorsigtelike rol vervul in die komitees waarin hulle dien. Ek weet die agb lid gaan ook haar rol speel. Terselfdertyd rus daar ook 'n groot verantwoordelikheid op die bre publiek om spaarsamig te lewe en meer te doen vir die positiewe opbou en uitbreiding van Suid-Afrika. Die ANC ondersteun die Wetsontwep. Dankie. (Translation of Afrikaans paragraphs follows.)
Lately I have noticed that there is a message of bitterness, melancholy and pessimism emanating from certain members of the opposition. It is such a pity, because we reach consensus with regard to the Budget, yet some members cannot make peace with the transformation that happened in South Africa. It's a pity, because it is time for them to make peace with it, otherwise they will, while sitting at their dinner tables or having a barbeque, find it very difficult to swallow their meat or enjoy their dinners.
It is time for certain elements among the opposition parties, and there are indeed many of them who contribute positively to our committee, to put an end to their ongoing negativity. It is time for us to start thinking positively, to take hands and to stand together in building up this beautiful country even further so that we can serve the poorest of the poor and ensure them a better life.
The programme is in place, and all committee members are in a position to fulfil a clearer, more thorough monitoring and oversight role in the committees they serve. I know that the hon member will also play her part. At the same time the general public also has a huge responsibility to live frugally and do more with regard to building and developing South Africa in a positive manner. The ANC supports the Bill. Thank you.]
Hon Chairperson, whilst these budgets and allocations are determined by the current figures, we have to be mindful that the cost of living is going to increase through a number of factors. The electricity and petrol hikes will indeed add to this challenge. We have to apportion a certain amount of the monies for salary adjustments for the public sector.
In an economy where the cost of living is increasing, we don't want to engage in any social unrest. As far as possible, government must alleviate any form of unrest and make appropriate adjustments, given the real costs of living.
The MF welcomes the allocation to education. Yes, it is a very good thing to invest in our children and the infrastructure. However, we must ensure returns on our investments, hence monitoring is crucial.
Government's drive to ensure equality in the system is gratifying. However, we must be mindful that in the past three years there was no fundamental increase with regard to providing schools with educators. There seems to be a good percentage of unqualified and underqualified educators in the system and government must be mindful that budgeting takes place with this knowledge and background taken into account. The drive to employ qualified teachers with higher salary packages is welcomed. We must endeavour to improve learners' and educators' norms and standards.
The MF believes that this matter has not been adequately catered for in the current Budget and it is unlikely to be addressed. If we are to eradicate the triple challenge, alignment to the National Development Plan, NDP, is fundamental and it begins with these budgets and allocations.
Whilst Social Development gets the largest allocation, we must speed up job creation and ensure that people become economically active instead of depending on the state. Our social development programmes cannot always be based on taxation.
We applaud the initiatives for sorting out issues relating to grants, etc. Pensioners have huge families with many children to feed and take to school and many of them do not have houses with water and electricity. Yes, indeed, we have never built the number of houses we promised the poor.
Let us be mindful of our debt service costs. Perhaps we should also review our focus on fiscal discipline and diligence in order to ensure that in a Medium-Term Expenditure Framework cycle, we spend less on debt service costs and more on actual delivery that will change the lives of our people.
We must ensure that municipalities have the capacity, that the local government equitable share revised formula is fully supported, that allocations are spent on worthwhile infrastructure, and that there is provision for free basic services in order to eliminate service delivery protests.
Smaller municipalities experience difficulties restoring flood-damaged infrastructure and this has a negative impact on service delivery, which also threatens the safety and security of our people. Therefore the flood disaster allocation by government departments must be expedited.
Undoubtedly, monitoring is of paramount importance and the MF is very glad that the Minister has come out very strongly on the issues of fraud and corruption, as these are some of the greatest negative impediments that paralyse service delivery. The MF will support the Bill. [Time expired.] [Applause.]
House Chairperson, the first paragraph of the Division of Revenue chapter in the Budget Review states that the Medium-Term Expenditure Framework takes the National Development Plan, NDP, as its departure point. This is a plan which the ANC-led government has tabled, which all the opposition parties have supported, which civil society and business have got behind and which all economists across the ideological spectrum have welcomed.
The national planning commissioners have been drawn from every sector of society. These, ironically, include Chris Malikane, the chief economist of Cosatu. I say this because, while it may seem as if the whole country supports the NDP, in fact, the main critics of the plan are sitting in the tripartite alliance.
So, I have a question, Deputy Minister. What does it mean if our entire division of revenue is premised on the National Development Plan, yet the government's alliance partners are not only mildly opposed, but fundamentally opposed to the plan? For instance, when responding to the Budget, Cosatu said:
Aside from government, the only formations to have welcomed the NDP have been pro-business opposition parties and big business. Labour and many other progressives in the country have long realised that this plan is the reinforcement of the status quo in economic terms; hence the celebrations from the business sectors about it being made the alpha and omega.
When they appeared before the Finance committee, the key Cosatu union, Numsa, said:
The NDP is utilised as a point of departure for the Budget. Considering the severity of the country's socioeconomic challenges, as Numsa, we are extremely disappointed that the failed Gear and neoliberal macroeconomic policies are once again being hailed, under the facade of the NDP, as the perfect vehicle for addressing the country's challenges.
Now, my question is: Is it any use our debating the division of revenue if the departure ... [Interjections.]
Hon House Chair, on a point of order.
Yes.
Hon House Chair, the member is not debating the division of revenue. Indeed, he is not. Instead, he is just discussing the hearing on the fiscal framework. Thank you.
Hon Harris, will you stick to the topic, please.
Very well. Is it of any use our debating the topic of the division of revenue, as we are doing today, if the departure point of the entire thing is disputed by only one organisation that seems to have the political power to filibuster and block key policies and influence the direction of this government right from the very top? What will stop Cosatu from opposing the scrapping of cadre deployment, opposing those holding public servants to account or protecting nonperforming teachers?
On the topic of teachers, hon Sogoni, just to correct you for misleading the House: The DA in the Western Cape government has closed 18 schools, but opened 49 schools. The previous ANC administration in the Western Cape closed 47 schools.
In the past 12 years, ANC governments closed 110 schools in the Northern Cape, 170 schools in Limpopo, 215 schools in Mpumalanga, 590 schools in the Eastern Cape, 640 schools in North West and 1 100 schools in the Free State.
But, hon Deputy Minister, again I ask the most important question: Given Cosatu's opposition to the founding document of this division of revenue, how on earth does this government hope to see its funding a programme of action?
Cosatu has spent the past three years blocking the youth wage subsidy that by now would have created 178 000 jobs for young people. The Minister has retabled the plan, but it seems that Cosatu will block this one, too. In responding to the Budget, Cosatu said:
We reiterate our rejection of the youth wage subsidy as an incentive for employers to hire young people. This is not a solution to the unemployment crisis facing young people.
Numsa said:
We are stunned by government's attempt to reinstate the youth wage subsidy ... This is unacceptable.
That is what they called it. Deputy Minister, if Cosatu has successfully blocked the youth wage subsidy for three years and looks set to block this version, too what does it mean for this government when they oppose the very plan that is the departure point of this division of revenue? I ask you that, sir. Thank you. [Applause.]
Hon Chair, Ministers, Deputy Ministers and Members of Parliament, I don't think we will respond to Mr Harris because he is not a member of our committee. [Interjections.] A member of our committee has spoken and conveyed the views of all of us.
The ANC vision for the future is abundantly clear. We want a country where millions and more South Africans have decent employment opportunities, with modern infrastructure and a vibrant economy, where the quality of life is both sustainable and equitable.
This division of revenue presents a significant change from the 2012 division of revenue. We take note of the fact that the National Treasury has seriously considered the committee's recommendations where we had members of the DA in 2012 as part of our oversight. The tightening up on how respective grants in the provinces are applied for and spent is welcome.
The ANC principle of centralised planning is reflected in the fact that government's Medium-Term Expenditure Framework reflects the realignment of activities of departments to the National Development Plan, NDP, in which we believe. The economic freedom the ANC speaks of, and which the 2013 division of revenue seeks to achieve, is underpinned by the drive towards dealing effectively with the triple challenge of poverty, unemployment and inequality. Research published by the Development Policy Research Unit confirms that significant progress has been made in the delivery of housing, water, sanitation and many other basic services. Here, I will talk about what has been achieved and what anybody can see in line with the division of revenue.
With regard to health, the ANC's guiding policy framework, the Freedom Charter, states that a preventative health scheme shall be run by the state, where the aged, orphans, disabled and the sick shall be cared for.
The ANC-led government has made great progress in addressing the needs of the citizens and acknowledged that a lot still has to be done. The promise made to the people of South Africa can be seen in the transformation that the Department of Health has brought. We all know that the department has achieved many changes, namely an overall improved life expectancy; HIV/Aids campaigns that have gained momentum, with more people having been tested and those who tested positive being on ARV treatment; reduction in mother- to-child HIV transmission - the prices for medicine were negotiated and reduced and a lot of money has been saved; and the department having finalised the health facilities audit in all the provinces. The list goes on. Underspending of conditional grants, as it has been with all the members of the committee, has been our great concern. The big question was: How can money allocated for a specific purpose on infrastructure not be spent on it? As a result, the ANC-led government and the National Treasury came up with the solution that the three conditional grants must be merged. These are the hospital revitalisation grant, which has R10,7 billion; the health infrastructure grant, which has R3,8 billion; and the nursing college and school grant, which has R269 million. This allows flexibility to move funds from poorly performing projects to performing projects within the province.
Business plans should be submitted to the Department of Health two years in advance and incentives must be given where the provinces have proven capacity. Building blocks have been put in place since 2009 in readiness for the implementation of the National Health Insurance, NHI. Hospital revitalisation and the building of new hospitals are taking place to make public hospitals places of choice and of universal coverage. Unlike private hospitals, which remain extremely costly and do not allow for universal coverage, the NHI has a foundation and everybody knows where it is going.
The health infrastructure grant demonstrates the extensive capital expenditure in the Bill and it is linked to the requirements of the NHI. There are 10 district pilot sites that have been identified, and practitioners who will be contracted to the clinics. Primary health care centres have been strengthened and schools have also been put in place so that more clinics can start there in order that a link may be established to assist with determining who should go to the clinic for consultation. That is a great improvement, part of the vision of the ANC.
Regarding social development the social grant allocation is R113 billion for the 2013-14 financial year and will be increased to R129 billion in the 2015-16 financial year, reaching 17,2 million beneficiaries. The grants are implemented and administered by a separate national government agency, known as the South African Social Security Agency, Sassa.
The main objectives are to alleviate poverty and improve the socioeconomic status of vulnerable persons and families as it addresses health, education and the income of the poorest of the poor. There are several other interventions by the government which address the plight of the poor, most of whom are found in the informal settlements, where they are plagued by social factors resulting in a lot of social ills.
The Budget also provides for additional funding to provincial welfare services in the medium term, including the absorption of social work graduates, nongovernmental organisations which are facing a decline in donor funding, social sector support that is lent by the Expanded Public Works Programmes, EPWPs, where we find early childhood development, ECD, training and community-based care workers, who are funded through those EPWPs.
Sassa's separate administration enables social workers to concentrate on their core functions. The social fabric of families and communities is disintegrating. We are faced with the scourge of social abuse and sexual assault of children. Social work and community development skills and professional interventions are needed to address these increasing scourges.
Infrastructure grant allocations are given to education to address both basic and higher education. This proves that the ANC will not rest until every child is educated and every citizen has received tertiary education which is linked to the economic skills of the country.
Close monitoring of the performance of the above-mentioned grants by Parliament is crucial. Parliament exercises oversight over departments and it is the Members of Parliament who, as public representatives, should demand value for money, as it is public funds that are used for infrastructure projects.
Weak capacity and integration and poor co-ordination of projects reduce the impact of infrastructure. The Presidential Infrastructure Co-ordinating Commission, PICC, has identified these infrastructure gaps. Eighteen strategic integrated projects were developed to support economic development and address service delivery in the poorest communities. Through infrastructure and industrialisation, jobs will be created as outlined in the New Growth Path. This lays the foundation for higher growth ... [Interjections.]
Hon member, just a moment. Hon members, the pitch of your conversations is too high and you are drowning out the speaker. She cannot be heard. I've had complaints from some members that they can't hear. Please, let's lower our voices and let the speaker be heard. Continue, hon member!
Through infrastructure and industrialisation, jobs will be created as outlined in the New Growth Path. This lays the foundation for higher growth and the improvement of the lives of our people. We must see that the division of revenue has presented a significant change from the 2011-12 division of revenue. It reflects the policy shift, and particularly emphasises that the governing party wishes to see change through the equitable division of nationally raised revenue and the other allocations to municipalities and provinces.
We appreciate the fact that we used one voice as members of the Standing Committee on Appropriations. We sat there, deliberated, and looked at what was wrong or right. As a collective, we agreed that we needed more capacity and efficiency from the officials so that the money that has been allocated and appropriated is used properly. Let us unite as we march towards socioeconomic freedom in our lifetime. Let us all realise that through the leading party, the ANC, there is progress and a lot of change. People who stand here, like Mr Harris, will always come here and wish that things could be done differently. Thank you. [Time expired.] [Applause.]
Chairperson and hon members, I thank you for supporting this Division of Revenue Bill. I take it that the support we need is from this House' and nowhere else.
In tabling the Division of Revenue Bill together with the Budget this year a number of changes were tabled. Let me touch on a few of them. Firstly, there is the number of policy adjustments. The first one is the human resettlements function which is being assigned to six metropolitan municipalities, where the target date of assignment to those accredited municipalities is 1 July 2013.
Secondly, in the Medium-Term Budget Policy Statement the Minister announced that over the next three years government aims to achieve better value for money from investment in provincial infrastructure.
A new system is being introduced to improve planning and implementation in provincial health, education and infrastructure. Many of the members raised the issue of capacity and implementation as an issue. This is being addressed, and we would like municipalities and provinces to focus on and also pay particular attention to the use of the Infrastructure Delivery Improvement Programme, Idip.
Thirdly, the Department of Health, as hon Mashigo has indicated, currently administers three conditional grants targeted at addressing health infrastructure backlogs in the provinces. Those grants have been merged together in order to achieve some flexibility and relevant clauses deal with the implementation of that shift.
Fourthly, reporting requirements for infrastructure grants have been strengthened in a number of clauses, namely clauses 9(1)(d), 10(7)(a) and 11(4)(c). Provinces will now be required to gazette lists of infrastructure projects for education, health and roads for all projects funded from conditional allocations.
Fifthly, various grants are targeted towards disaster relief. Mr Bhoola made mention of expediting the disbursement of this disaster relief funding, including provincial and local government disaster grants. This has been attended to.
Mr Swart talks about the new municipal water grant which does not make provision for sanitation. If you read the document properly, you will realise that the rural households infrastructure grant is specifically targeted towards sanitation roll-out in rural areas and onsite solutions. The municipal infrastructure grant also targets this infrastructure. If you read the document properly, you will understand that that matter has been addressed.
The other problem is with regard to underspending on conditional grants by municipalities. This new municipal water grant will also use existing capacity in the system such as the water boards and other structures. The Municipal Infrastructure Support Agency, Misa, which is in the Department of Co-operative Governance and Traditional Affairs, is also part of the instruments that we are going to use in order to get efficiencies here. The SA Local Government Association, Salga, also plays a key role in supporting municipalities.
Mr Singh talks about Parliament having an earlier say in the Budget process. The Medium-Term Budget Policy Statement is your first opportunity to engage. But the other matter you raised, together with a number of other members, is with regard to Parliament not being able to amend money Bills even though legislation is already in place. You say it is because of the constraints. Besides those constraints, I think we must remember that before you are able to implement any legislation - and this is our legislation - you must take into account, firstly, the days of our Lord - that's how long a year is. Secondly, there is the parliamentary process. All those timeframes were put in place in order to fit in that process. Therefore, if you actually wanted to do anything, maybe we would have to appeal for the expansion of the days of our Lord, and the parliamentary process will then also be able to fit.
But, as things stand, I think you've missed an opportunity, because you could have engaged in it. The Division of Revenue Act, Dora, was tabled together with the Budget in February. Between February and now, if you had applied the legislation as it stands, you would have been able to do that.
Mr Ramatlakane also refers to Dora as a money Bill. Dora isn't a money Bill; we all know that. So, it wouldn't have been impacted upon by this legislation. Those are the restraints we will have to operate within but we will be able to implement it. I also trust the support. We fully welcome the establishment of the Budget Office that will assist in giving members adequate information and expertise that will enable them to engage in the process.
You also talk about the national departments where direct grants must have substantial oversight over the responsibilities and the shift, moving to local municipalities. As we know, that infrastructure function is actually a constitutionally mandated basic need and local government should take full charge of this.
I think we should not focus on where the grant resides, but on where it is most effective. I think we have a duty and a role, particularly in the Appropriations committee and the sector committees, to use all these instruments that we have put in place to make sure that we exercise oversight and ensure that the grants are well and properly spent. We must also deal with all other issues that members have raised, including the issue of fraud and corruption. Unless we deal with that one in all its manifestations, we will not be able to resolve the issue of leakages in government.
Concerning the issue that money was being spent on consultants and could have been used elsewhere, I find Mr Ramatlakane's calculation quite suspect. But it all remains to be seen, because now that you are going to have an opportunity to deal with each department that has spent money on consultants, you will be able to determine exactly how much of it shouldn't have been spent on consultants. We can't just say all money spent on consultants has been inappropriately spent.
I have responded to your failure to amend legislation, but I trust that the legislation before us, as it has been supported by all of us, will be acceptable to this House.
Mr Harris, I see you have imposed yourself as a member of the Appropriations committee. Your status as shadow minister of finance causes problems, because you raise shadow arguments. [Laughter.] Firstly, he focuses on one paragraph in the entire Division of Revenue Bill and says that as long as it is not supported by the Congress of South African Trade Unions, Cosatu ... [Interjections.] Since when are you persuaded by Cosatu's response on matters raised in this House? Since when are you an advocate of the voice of labour in this House?
Everybody has appeared before the committee and all these matters have been taken into consideration. They have been brought to this House with the recommendation that we all support the Division of Revenue Bill. That's the support we have just received. For your information, this Bill, together with the Appropriation Bill, has also been tabled at the National Economic Development and Labour Council, Nedlac, with no dissenting voice. The issues that you are mentioning are matters that are out there because they are exactly similar to those you share with Cosatu in the opposition about e-tolling, but you don't bring them here. But now you come here selectively and say that because the National Development Plan, NDP, is not supported, the Dora is also not supported. That's far below the belt. However, we understand it is election time, Mr Harris. Go ahead and enjoy yourself. We will all play into that space when the time comes. But for now you can start with yours upfront.
Regarding the issue of the closing of schools that you tried to respond to, the fact of the matter is that the schools that were closed by the DA in the Western Cape were in poor communities. The schools that you talk about as having been opened are in affluent areas. For that I must tell you ... [Interjections.] We thank you for supporting the Division of Revenue Bill that we are tabling here today, together with the DA, although you have reservations. It takes forward the transformation agenda of the ANC. [Interjections.] You can go ahead and change your mind, you will still ... [Interjections.]
Thanks to the committee that has dealt with the Division of Revenue Bill. We are confident that the implementation is also going to be supported by all, as hon Gelderblom has called upon all of us to work towards making sure that this is implemented, and that we make sure that the funds that have been allocated are spent and are appropriately spent. We all take up the fight of making sure there are no leakages and of defeating the scourge of corruption and leakages. Thank you very much. [Applause.]
Debate concluded.
Bill read a second time.