Hon Chairperson, Ministers and members of the executive councils, MECs, chairperson of the select committee, hon Pat Sibande, hon members, distinguished guests, it is always humbling to be given the opportunity to account to the people of South Africa through this august House, which deals with matters pertaining to provinces. I take great pleasure in presenting to you the 2011-12 Budget Vote.
Of great importance is that this month is Youth Month, which makes it fitting to remember the young heroes who sacrificed their lives for the freedom of this country. We remember, among others, Hector Pieterson, and Kalushi Solomon Mahlangu, who uttered the following words on his way to the gallows:
Mama, do not cry. Tell my people I love them and that my blood shall nourish the tree that shall bear the fruits of freedom.
Fellow South Africans, it is our obligation to ensure that these words of wisdom and bravery are not in vain. In memory of these heroes and many others, we will continue to triple our efforts in the quest for faster service delivery but also, most importantly, for the provision of shelter to the homeless not to remain just a dream, but become a reality.
The President of the Republic, Mr Jacob Zuma, made the following observations during his state of the nation address in February this year:
Whilst many South Africans celebrate the delivery of houses, electricity or water, there are yet many others who are still waiting. The legacy of decades of apartheid, underdevelopment and colonial oppression cannot be undone in only 17 years.
Subsequently, the Minister of Finance, Pravin Gordhan, stated the following in his Budget Vote:
Spending on housing, water, electricity and community amenities amounted to R122 billion for 2011-12, rising to R138 billion in 2013-14.
The President and Minister signed a performance agreement known as Sustainable Human Settlements and Improved Quality of Household Life, otherwise known as Outcome 8. It encompasses the following outputs: the acceleration of the delivery of housing opportunities, access to basic services, the effective utilisation of land, and an improved property market. Let us briefly deal with each of the above.
Regarding the acceleration of the delivery of housing opportunities, out of the 2 700 informal settlements that exist countrywide, 1 100 of these imijondolo [slums] have been identified for upgrading. The formalisation of 206 of these informal settlements has been completed. A further 335 are in the pipeline. The National Upgrading Support Programme is currently being rolled out to ensure that 49 municipalities have the necessary capacity.
South Africa's population is just under 50 million, of which more than half is urbanised. Our strategy on urban planning and development is therefore undergoing a radical shift in order to adequately respond to urbanisation. Many job seekers in urban areas are not looking to stay in a permanent home but are seeking rental accommodation. Thus there is an increased demand for affordable and well-located rental accommodation.
We have developed a project pipeline with a mix of public-private sector rental stock. The following are examples of what has been achieved thus far: the Umlazi community rental unit programme in KwaZulu-Natal; Brooklyn social housing programme in Cape Town, known as Drommedaris; Amalinda institutional housing subsidy in Buffalo City; Morgens Village housing project in Mitchells Plain; Emerald Sky in Buffalo City; the Cavendish inner-city private sector rental in Johannesburg; small-scale private rental for backyard dwellers in Zola Township in Gauteng; and many others.
All of these are aimed at creating 80 000 rental opportunities by 2014. The leadership of the Social Housing Regulatory Authority, known as SHRA, established last year, must continue to play a key role in all these efforts. A great deal is expected of its board.
Under this deliverable it is important to note that all South Africa's metros with two district municipalities have recently been accredited to drive human settlements projects. This means that for the first time ever funds will be directed straight from the national department into the coffers of the respective municipalities. They include the City of Johannesburg, City of Tshwane, eThekwini Metro, Ekurhuleni Metro, Nelson Mandela Metro, the City of Cape Town, Francis Baard and Pixley Ka Seme district municipalities in the Northern Cape.
Regarding the improvement of access to basic services, we are playing a supportive role to the Department of Co-operative Governance and Traditional Affairs in the provision of basic services such as water, electricity, refuse removal and sanitation.
With regard to the effective utilisation of land, according to our mandate the department is expected to acquire 6 250 hectares of suitable land by 2014. On a positive note, through our institution, the Housing Development Agency, HDA, the department has already achieved this target, long before 2014. Beyond this, more than 20 000 hectares of land suitable for housing have already been identified by the HDA.
On the issue of an improved property market, by November 2010 the department had received overwhelming support in the form of proposals to implement the R1 billion guarantee from many private-sector stakeholders. I want to thank all contributors for their submissions. The department found merit in each proposal. While many were useful, we opted for the mortgage default insurance, known as MDI, as the core implementation strategy. This insurance has strong potential to contribute towards the attainment of the 600 000 loans to the target market. It is envisaged that the mortgage insurance product will be available through the banks as from April 2012. I would therefore urge the National Housing Finance Corporation and the banks to accelerate delivery of affordable houses in terms of the memorandum of understanding they have concluded. Increasing access to and the affordability of home ownership can help stimulate the construction sector, which will provide much-needed jobs. This resonates with our economic policy, the New Growth Path.
Material suppliers are cautioned to contain the cost of their products and avoid any form of collusion which promotes anticompetitive practices. People building their own homes, particularly the poorest of the poor, cannot and should never be exploited.
We have established our delivery and accountability structures in the form of the Human Settlements Implementation Forum. The Human Settlements department is the co-ordinating department. Other participating stakeholders are the Departments of Water Affairs; of Rural Development and Land Reform; of Public Enterprises; and of Co-operative Governance and Traditional Affairs, Cogta; the SA Local Government Association, Salga; provinces, and accredited municipalities
In relation to the target of about 200 000 subsidised houses and housing opportunities, the provinces have already spent 98% of the funds allocated to them, despite some major obstacles. Our "Follow the Money" campaign helped us to be watchful of expenditure trends throughout the year. This applies to both the operational budget and capital expenditure.
On the issue of procurement, an investigation into procurement in the department is also currently under way, with specific emphasis on overpayment to suppliers. In one of the cases under consideration the supplier admitted to overpayment and has opted to pay an amount of almost R300 000 back to the department. While this is applauded, such a situation should not have arisen in the first place. It is important that invoices and payments should be synchronised. Nothing must deter us from fighting and rooting out corruption wherever it manifests itself. Our resolve remains firm on this issue.
On the 80-20 split of the human settlements development grant, as of 1 April 2011, the national Human Settlements budget is allocated in the form of a 80-20% split. The provinces are allocated 80%, and 20% is directed from national level for specific interventions. As a start, the following projects have been identified as national priority interventions funded from the 20%: Duncan Village in Buffalo City, Eastern Cape; Lufereng, Sweetwaters, Khutsong and Diepsloot in Gauteng; Cornubia in eThekwini, KwaZulu-Natal; Lephalale around Medupi station in Limpopo; and Drakenstein in the Western Cape. The investment being made in all these intervention areas is in the amount of R886 million in the 2011-12 financial year and a billion in the outer year.
Regarding the budget focus for 2011-13, the budget for 2011-12 has increased to R22,5 billion, a 38% increase from 2010-11, and is expected to grow to R26,6 billion in 2013-14. Over the 2011 Medium-Term Expenditure Framework, MTEF, period, the conditional grant to provinces grows from R14,7 billion in 2011-12 to R16,2 billion in 2013-14.
The housing disaster relief grant, which was utilised to facilitate housing assistance in emergency situations, is being discontinued in 2011-12. Over the 2011 period an amount of R1,2 billion has been provided to fund the rural households infrastructure grant. It is to provide specific capital finance for the eradication of rural sanitation backlogs, targeted at households without current access to sanitation and water.
National Treasury has provided funding for a new grant for cities, namely the urban settlements development grant. It will allow eight metropolitan municipalities to improve efficiency to maximise development outcomes and achieve a co-ordinated approach to the management of the built environment. Over the 2011 MTEF period, amounts of R6,4 billion for 2011-12, R7,6 billion for 2012-13 and R8,3 billion for 2013-14 have been allocated to this grant. The department's main cost driver remains the human settlements development grant, together with the new urban settlements development grant for cities. In respect of these grants, the total allocation of R21,2 billion in the 2011-12 financial year represents an amount of about 94% of the department's total allocation.
The vision for 2030 speaks of deracialising our society. The idea is to build social cohesion within communities. As the Department of Human Settlements, we have moved away from a delivery model that focuses on numeric targets alone. We have moved towards an outcomes approach in the creation of sustainable human settlements and an improvement in the quality of each housing unit we produce.
The Minister and I have just returned from Limpopo where, through the YouthBuild programme, the youth were volunteering to build houses for people, particularly the elderly and child-headed households. They took three weeks and built 76 houses of top quality. It was humbling to discover that some of the beneficiaries were over 100 years old and could no longer walk. The houses were built to suit their disability as a result of old age, and they also received wheelchairs.
Allow me to thank all those stakeholders who made YouthBuild a success. These are the National Youth Development Agency, NYDA; African National Congress Youth League, ANCYL; and many other nongovernmental organisations, NGOs, as well as the unemployed youth who came as volunteers from all provinces. We thank the Limpopo province for agreeing that these volunteers be deployed in other projects for the next 18 months. This is indeed job creation and skills development in action. This is how our people in South Africa have begun commemorating the 35 years after the class of 1976. We thank everybody for celebrating Youth Month, and we believe that this budget will enhance that process. Thank you. [Applause.]