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									16 NOVEMBER 2010                              Page: 1 of 264

                        TUESDAY, 16 NOVEMBER 2010

                                   ____



                   PROCEEDINGS OF THE NATIONAL ASSEMBLY

                                   ____

The House met at 14:03.



The Speaker took the Chair and requested members to observe a moment

of silence for prayers or meditation.



ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS – see coll 000



                               NEW MEMBER



                             (Announcement)



The SPEAKER: Hon members, I wish to announce that a vacancy which

occurred owing to the passing away of Ms A M Rantsolase has been

filled by the nomination of Mr K A Moloto, with effect from

9 November 2010. In terms of section 48 of the Constitution, members

of the National Assembly must swear or affirm faithfulness to the

Republic and obedience to the Constitution before they begin to

perform their functions in the National Assembly. Hon Chief Whip of

the Majority Party, are your members ready?
16 NOVEMBER 2010                             Page: 2 of 264


The CHIEF WHIP OF THE MAJORITY PARTY: Hon Speaker, they are. They

are outside, waiting to be sworn in.



The SPEAKER: Will two members please accompany the member into the

Chamber? [Applause.]



                                OATH



Mr K A Moloto, accompanied by Ms N D Ngcengwane and Ms M L Dunjwa,

made and subscribed the oath, and took his seat.



                         NOTICES OF MOTION



Ms E MORE: Mr Speaker, I hereby give notice that on the next sitting

day of the House I shall move on behalf of the DA:



   That the House —



   (1) debates the findings of the latest HIV antenatal clinic

       survey; and



   (2) comes up with recommendations on how to further reduce the

       transmission of HIV from HIV-positive mothers to their

       babies.



I thank you.
16 NOVEMBER 2010                           Page: 3 of 264


Mr N J J KOORNHOF: Mr Speaker, I hereby give notice that on the next

sitting day of the House I shall move on behalf of Cope:



   That the House debates the consequences to Johannesburg of the

   failure of government to deal adequately and robustly with the

   rising water table in the city.



Mrs T E KENYE: Mr Speaker, I hereby give notice that on the next

sitting day of the House I shall move on behalf of the ANC:



   That the House debates the extension of service hours for clinics

   and community health centres.



Mr N SINGH: Mr Speaker, I hereby give notice that on the next

sitting day of the House I shall move on behalf of the IFP:



   That the House debates the consolidated report by the Auditor-

   General of national and public entities for the period 2009-10,

   and particularly the many accounting irregularities by public

   entities contained therein.



Rev K R J MESHOE: Mr Speaker, I hereby give notice that on the next

sitting day of the House I shall move on behalf of the ACDP:



  That the House debates ways to inform and educate the public,

  particularly the transport industry, about the rationale behind
16 NOVEMBER 2010                           Page: 4 of 264


  the pending implementation of the new traffic demerit system that

  many are opposing.



Thank you.



Mrs A T LOVEMORE: Mr Speaker, I hereby give notice that on the next

sitting day of the House I shall move on behalf of the DA:



  That the House debates the issues that should inform the much-

  needed development of a comprehensive migration policy for South

  Africa.



Mrs G M BORMAN: Mr Speaker, I hereby give notice that on the next

sitting day of the House I shall move on behalf of the ANC:



   That this House debates the future of informal settlements in

   South Africa with a view to finding solutions to the problem of

   housing the ever-increasing number of people migrating to our

   cities and towns.



Mrs L S MAKHUBELA-MASHELE: Mr Speaker, I hereby give notice that on

the next sitting day of the House I shall move on behalf of the ANC:



   That the House debates the integration of community development

   workers into the public sector.
16 NOVEMBER 2010                            Page: 5 of 264


Mr D A KGANARE: Mr Speaker, I hereby give notice that on the next

sitting day of the House I shall move on behalf of Cope:



   That the House debates the incidence of yet another R380 million

   in irregular and fruitless expenditure incurred by the Road

   Traffic Management Corporation and the failure of government to

   deal decisively with errant officials.



Dr S M VAN DYK: Agb Speaker, op die volgende sittingsdag van die

Huis sal ek namens die DA voorstel:



    Dat die Huis ’n debat voer oor die regering se botsende

    benadering ten opsigte van die Infraco Company wat deur die

    regering as openbare onderneming in die lewe geroep is om

    telekommunikasiedienste aan die gewone verbruiker en die

    platteland te lewer, maar terselfder tyd ’n kabinetsbesluit

    geneem het om nie Infraco Company te lisensieer om hierdie

    dienste te kan lewer nie.

(Translation of Afrikaans notice of motion follows.)



[Dr S M VAN DYK: Hon Speaker, on the next sitting day of the House I

shall move on behalf of the DA:



   That the House debates government’s conflicting approach with

   regard to the Infraco Company which has been established by

   government as a public enterprise to deliver telecommunication
16 NOVEMBER 2010                           Page: 6 of 264


   services to the ordinary user and rural areas, whilst at the same

   time taking a cabinet decision not to give the Infraco Company a

   license to be able to offer these services.]



Mnr P VAN DALEN: Agb Speaker, op die volgende sittingsdag van die

Huis sal ek namens die DA voorstel:



   Dat die Huis -



  (1)   ’n debat voer oor die korrelbedkernkragreaktor as openbare

        onderneming se vermoë om tot Suid-Afrika se energiebehoeftes

        by te dra, ten spyte daarvan dat die belastingbetaler reeds

        miljarde rande tot die projek bygedra het; en



  (2)   die uitfasering of die privatisering van hierdie openbare

        onderneming in sy debatvoering oorweeg.

(Translation of Afrikaans notice of motion follows.)



[Mr P VAN DALEN: Hon Speaker, at the next sitting of the House I

will move on behalf of the DA:



  That the House –



  (1)   debates the ability of the pebble bed modular reactor, PBMR,

        as a public enterprise, to contribute towards South Africa’s
16 NOVEMBER 2010                                Page: 7 of 264


          energy needs, in spite of the taxpayer already having

          contributed billions of rand to the project; and



  (2)     considers the phasing out or the privatisation of this

          public enterprise during its debate.]



Mr M A NHANHA: Mr Speaker, I hereby give notice that on the next

sitting day of the House I shall move on behalf of Cope:



  That the House debates the alarming observation by Chief Justice

  Ngcobo that fundamental flaws exist in the dispensing of justice

  and reserved judgements in this country.



  KYOTO PRIZE FOR ARTS AND PHILOSOPHY AWARDED TO WILLIAM KENTRIDGE



                           (Draft Resolution)



The CHIEF WHIP OF THE MAJORITY PARTY: Mr Speaker, I move without

notice:



  That the House –



  (1)     notes that South African artist William Kentridge has been

          awarded the 2010 Kyoto Prize for Arts and Philosophy,

          becoming the first African recipient of Japan’s highest

          private award for global achievement;
16 NOVEMBER 2010                               Page: 8 of 264


  (2)   further notes that the awards, now in their 26th year, are

        regarded as Japan's equivalent of the Nobel Awards, with

        prizes awarded each year in three categories, namely: Arts

        and Philosophy, Advanced Technology and Basic Sciences;



  (3)   recognises that these prizes honour “significant

        contributions to the betterment of humankind” and each comes

        with a cash award of 50-million; and



  (4)   congratulates William Kentridge on winning this prestigious

        award and for flying the South African flag high.



Agreed to.



        150TH ANNIVERSARY OF ARRIVAL OF INDIANS IN SOUTH AFRICA



                          (Draft Resolution)



The CHIEF WHIP OF THE OPPOSITION: Mr Speaker, I move without notice:



  That the House –



  (1)   notes that today marks the 150th anniversary of the arrival

        of the first people of Indian origin on South African shores

        to work as indentured labourers in the sugar plantations of

        Natal;
16 NOVEMBER 2010                                   Page: 9 of 264




  (2)     further notes the celebrations and festivities planned to

          commemorate this event;



   (3) acknowledges the influence of Indian traditions and customs

          that not only significantly contributed towards our shared

          cultural identity, but also shaped the vibrant South African

          socio-political landscape;



   (4) recognises the sacrifices made by generations of Indians to

          preserve their heritage and ethnic identities; and



   (5) wishes all South African Indians a memorable celebration of

          this event.



Agreed to.



                        INTERNATIONAL DAY FOR TOLERANCE



                              (Draft Resolution)



The CHIEF WHIP OF THE MAJORITY PARTY: Mr Speaker, I move without

notice:



   That the House –
16 NOVEMBER 2010                          Page: 10 of 264


   (1) notes that in 1996 the General Assembly of the United Nations

       invited member states to observe the International Day for

       Tolerance on 16 November, with activities directed towards

       both educational establishments and the wider public;



   (2) further notes that this action came in the wake of the United

       Nations Year for Tolerance, 1995, proclaimed by the General

       Assembly in 1993 and that the year had been declared on the

       initiative of the General Conference of UNESCO on 16 November

       1995;



   (3) acknowledges that tolerance is one of the foundations of

       democracy and human rights;



   (4) supports international efforts to promote tolerance through

       educational programmes, especially in conflict ridden

       countries;



   (5) calls on all South Africans to practise tolerance and to live

       together in peace with one another.



Agreed to.



      MULTILATERAL AGREEMENT BETWEEN SIX AFRICAN UNIVERSITIES

                     ON AFRICAN UNIVERSITY DAY
16 NOVEMBER 2010                            Page: 11 of 264


                           (Draft Resolution)



Mr M J ELLIS: Mr Speaker, I move without notice:



   That the House –



   (1) notes the signing of a multilateral memorandum of agreement

       between six African universities on African University Day,

       12 November 2010;



   (2) further notes that this agreement hopes to ensure the

       development of the next generation of African academics and

       professionals and the reinvigoration of African scholarship;



   (3) acknowledges the importance of this partnership for the next

       generation of African academics to stemming the brain drain

       in Africa and in creating new opportunities for collaborative

       research and exchange among institutions;



   (4) recognises the importance of higher education in the fight

       against poverty and the need for continental collaboration;

       and



   (5) congratulates the University of Stellenbosch for the success

       of its Hope Project, and its contribution to this continental

       agreement.
16 NOVEMBER 2010                            Page: 12 of 264


Agreed to.



           LAUNCH OF 17th WORLD FESTIVAL OF YOUTH AND STUDENTS



                           (Draft Resolution)



The CHIEF WHIP OF THE MAJORITY PARTY: Mr Speaker, I move without

notice:



    That the House –



   (1) notes with enthusiasm the launch of the 17th World Festival

          of Youth and Students on Thursday morning, 11 November 2010,

          in Johannesburg, by the Minister in the Presidency Mr O C

          Chabane;



   (2) further notes that the festival, organised by the National

          Youth Development Agency will be hosted in South Africa for

          the first time from 13 to 21 December 2010, at Nasrec, and is

          expected to attract about 30 000 local and international

          delegates including heads of state;



   (3) recognises that the festival is a platform that will bring

          together young people from across the globe, to work together

          to build a world of peace, solidarity and social

          transformation, free of human rights abuses;
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   (4) recalls that South Africa will be joining countries like

       Cuba, Venezuela and Korea who had successfully hosted the

       WFYS in the past; and



   (5) welcomes this initiative and believes that once again this is

       the indication of the confidence the international community

       has in South Africa as well as in our ability to host big

       events successfully as shown by our hosting of the FIFA

       Soccer World Cup.



Agreed to.



    APPOINTMENT OF TANZANIA’S FIRST FEMALE PARLIAMENTARY SPEAKER



                           (Draft Resolution)



Mrs J D KILIAN: Speaker, I move without notice:



   That the House –



   (1) notes with great pride the appointment of Tanzania’s first

       female parliamentary speaker, Anne Makinda, on Friday,

       12 November 2010;
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   (2) further notes that this is the first time in the history of

       Tanzanian politics since Chama Cha Mapinduzi came to power in

       1961 that a woman has taken up such a position;



   (3) recognises that it is in a year that has also seen the first

       albino woman, Benedict Mahaka, elected to parliament early

       this month, in spite of the prevailing discrimination against

       albinos;



   (4) acknowledges the significant strides that women on the

       continent are making, especially in those positions of power

       that were previously male-dominated on account of traditional

       practices in conservative Africa; and



   (5) congratulates Speaker Makinda warmly and encourages her to

       allow opposition parties to play their role effectively, to

       give support for meaningful debates on a new constitution and

       to ensure that the executive is fully accountable in line

       with modern democratic practices.



Agreed to.



                   REMUNERATION OF PRESIDENT OF RSA



                          (Draft Resolution)
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The CHIEF WHIP OF THE MAJORITY PARTY: Hon Speaker, I move:



   That the House —



   (1) in terms of section 2(1) of the Remuneration of Public Office

       Bearers Act, 1998 (Act No 20 of 1998), and having due regard

       to the criteria listed in that subsection, determines the

       salary payable to the President of the Republic of South

       Africa at two million, three hundred and sixty seven thousand

       four hundred and sixty six rand (R2,367,466) per annum with

       effect from 1 April 2010; and



   (2) in terms of section 2(1) of the said Act, determines the

       amount of one hundred and twenty thousand rand (R120 000) per

       annum as that portion of the remuneration of the President to

       which section 8(1)(d) of the Income Tax Act, 1962, shall

       apply.



Agreed to.



     DEADLINE FOR AD HOC COMMITTEE ON PROTECTION OF INFORMATION

                       LEGISLATION TO REPORT



                         (Draft Resolution)



The CHIEF WHIP OF THE MAJORITY PARTY: Mr Speaker, I move:
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   That the House extends the deadline by which the Ad Hoc

   Committee on Protection of Information Legislation has to report

   to 28 January 2011.



Agreed to.



 DEADLINE FOR AD HOC COMMITTEE ON COMMISSION FOR GENDER EQUALITY TO

                                REPORT



                          (Draft Resolution)



The CHIEF WHIP OF THE MAJORITY PARTY: Mr Speaker, I move:



   That the House extends the deadline by which the Ad Hoc

   Committee on the Commission for Gender Equality Forensic

   Investigation has to report to 28 January 2011.



Agreed to.



DEADLINE FOR JOINT AD HOC COMMITTEE ON CODE OF JUDICIAL CONDUCT AND

                         REGULATIONS TO REPORT



                          (Draft Resolution)



The CHIEF WHIP OF THE MAJORITY PARTY: Mr Speaker, I move:
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   That the House, subject to the concurrence of the National

   Council of Provinces, extends the deadline by which the Joint Ad

   Hoc Committee on the Code of Judicial Conduct and Regulations on

   Judge’s Disclosure of Registrable Interests has to report to

   28 January 2011.



Agreed to.



               KILLING OF BRITISH TOURIST ANNI DEWANI



                        (Member’s Statement)



Mr D M GUMEDE (ANC): Hon Speaker, the ANC, together with all members

of the Portfolio Committee on Tourism, notes with shock the

senseless killing of a British tourist, Anni Dewani, while on

honeymoon with her husband in Cape Town. They were hijacked while

taking a drive through Gugulethu to experience the night life in a

South African township. We express our sincere condolences to the

family and friends of the victim and wish her husband strength and

comfort during this very difficult period.



During the World Cup South Africa won the hearts of the world as a

destination and as a nation. We cannot allow these animals to

destroy this image. We thus urge the people of Gugulethu and the

surrounding areas, in partnership with the police, to triple their

actions to ensure that these scoundrels are speedily apprehended.
16 NOVEMBER 2010                          Page: 18 of 264


We further appeal to the tourism industry and the public to be

vigilant in regard to tourism safety, and to caution visitors not to

enter unfamiliar areas, especially at night. Thank you. [Applause.]



                     CASH INJECTION INTO ESKOM



                        (Member’s Statement)



The LEADER OF THE OPPOSITION (DA): Hon Speaker, yesterday I sent a

request to the Speaker calling for an urgent debate to be held in

the House today, about the government’s plans to make a R20 billion

cash injection into the failing parastatal Eskom. This allocation

would be made available to Eskom in addition to its recently doubled

guaranteed framework of R350 billion. Notwithstanding the Speaker’s

response declining the request, on the grounds that it did not

qualify as a matter of urgent national importance, the Cabinet’s

vacillation on the source of this additional funding indicates the

deep divisions in the executive.



That this announcement was made without prior public consultation

and, seemingly, without a detailed financial plan and endorsement by

the Minister of Finance by virtue of its not traversing the

prescribed Treasury protocols, indicates a blatant disregard for

transparency and accountability by the Zuma administration. This is

a clear attempt by the ANC government to undermine the basic

principles on which our democracy is based.
16 NOVEMBER 2010                             Page: 19 of 264


The DA regards this as a matter of urgent national importance. While

the DA absolutely supports the need to secure South Africa’s future

energy suppliers, Parliament and the public have the right to know

why Eskom requires this additional allocation of state funds, and

how government plans to finance its R20 billion commitment,

especially given that just three months ago the government could not

find R4 billion to fund an operational budgetary requirement to meet

the public servants’ pay rise demands.



The President must demonstrate that his administration is committed

to accountability, and make a full disclosure of how the government

plans to fund the proposed cash injection into Eskom, and what the

exact opportunity cost of this intervention will be to the people of

South Africa.



                ARMS DEAL INVESTIGATION BY BRITISH COMPANY



                           (Member’s Statement)



Mr M G P LEKOTA (COPE): Speaker, Cope welcomes with optimism the

decision by Britain’s auditing watchdog to name those South Africans

who took bribes of, reportedly, R1 billion in the arms deal. Today

many innocent South Africans walk around with the stigma of

association with the Defence acquisition our country entered into.

Suspicions that they are perhaps implicated persist.

[Interjections.]
16 NOVEMBER 2010                           Page: 20 of 264


The SPEAKER: Order! Hon members.



Mr M G P LEKOTA (COPE): It is right and proper that the

transgressors should be named and shamed, and then tried and jailed.

Their assets and the assets of their colluding spouses, where

warranted, should thereafter be seized. The Accountancy and

Actuarial Discipline Board of the UK is scrutinising KPMG’s

confidential records on BAE. It is anticipated that its audit will

reveal financial evidence that BAE indeed paid out huge bribes to

supply Hawk trainer aircraft and Gripen fighter jets to South Africa

for R2,1 billion.



Already a completed investigation in the UK and Liechtenstein points

to allegedly obscene payments of more than R200 million by BAE. One

of our citizens once served in the Department of Defence. Whilst

SA Police investigators have been impotent, other investigators

abroad are about to blow the lid on some of the alleged

28 politically well-connected individuals who cashed in. The fact

that BAE recently settled a £286 million fine for failing to comply

with global antibribery rules is evidence that BAE has been using

improper influence. Thank you. [Time expired.] [Applause.]



    FESTIVE SEASON CRIME-FIGHTING CAMPAIGN OPERATION DUTY CALLS



                        (Member’s Statement)
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Ms M A MOLEBATSI (ANC): Hon Speaker, on 4 November 2010 the Minister

of Police, supported by the department and senior management of the

SA Police Service, SAPS, launched Operation Duty Calls, which is a

festive season crime-fighting campaign. The operations will include:

high police visibility, increased roadblocks, and stop-and-search

operations. Police will also execute high-density operations while

maintaining visibility at all hot spots.



The ANC supports the drive by the Minister and SAPS to mobilise our

force over the period. Let me in advance thank the men and women in

the SAPS, who will sacrifice by working over the festive season so

that we can spend our time safely with our families. We call upon

all citizens of our country to co-operate and work together with our

SAPS members to fight crime, particularly during the festive season.

Viva, Operation Duty Calls! Viva!



               CONDOLENCES TO FAMILY OF SHRIEN DEWANI



                        (Member’s Statement)



Mr V B NDLOVU (IFP): Mr Speaker, the IFP wishes to express sincere

condolences to the friends and family of Shrien Dewani. The IFP

trusts that our Police Force are leaving no stone unturned in their

efforts to swiftly bring these criminals to justice. We urge all

local government sections to take the necessary preventative
16 NOVEMBER 2010                            Page: 22 of 264


measures in making sure that all tourists arriving in our country

are well informed about which areas are unsafe to travel through.



In this regard, we suggest that general tourist safety information

packs be placed on all in-bound flights to South Africa. Heinous

crimes such as this have no place in South Africa. We urge the

Minister of Police to send a very clear message to the perpetrators

of this crime to the effect that no crime will be accepted. They

will be caught and they will pay dearly for it. I thank you, Mr

Speaker.



           DESTRUCTION AT MINES BY AURORA EMPOWERMENT SYSTEMS



                          (Member’s Statement)



Mr L W GREYLING (ID): Speaker, the tragic saga of the Grootvlei and

Orkney mines, which were awarded to Aurora Empowerment Systems,

represents everything that has to be fought against in South Africa.

It is an absolute scandal that this crisis has been allowed to

continue for over a year with devastating consequences for the

environment and workers’ rights. Throughout all of this the ANC has

remained quiet, while Aurora Empowerment Systems have been allowed

to sow destruction at these mines!



The ID wants to know why there was not proper due diligence in

regard to Aurora Empowerment Systems to ensure that they could
16 NOVEMBER 2010                          Page: 23 of 264


actually pay for these mines and provide the necessary funding to

keep them operating. Due diligence in this case seems only to extend

to confirming that President Zuma’s nephew and his lawyer, and

Mandela’s grandson were directors of this company. To add insult to

injury, the workers have had to watch as Khulubuse Zuma has engaged

in public displays of huge wealth while continuing to insist that he

has no money to pay the workers on the mines.



In addition, millions of litres of untreated acid mine water have

been pumped daily into the surrounding wetlands, with devastating

environmental consequences. It has now also been reported that some

union officials are receiving death threats for questioning the role

of the liquidator Enver Motala’s complicity in this tragedy. This

must end. It is high time that the government intervened so as to

stop this tragedy from turning into a complete catastrophe. I thank

you.



             LAUNCH OF TR3 VISION 2010 AND TAXI ACADEMY



                        (Member’s Statement)



Ms N R BHENGU (ANC): Speaker, on 2 November 2010 the SA National

Taxi Association Council, Santaco, unveiled the TR3 Vision 2010 and

launched the taxi academy. The TR3 Vision 2010 is about redefining,

restructuring and refocusing the taxi industry as a key player in

the mainstream of the economy. The taxi academy will provide
16 NOVEMBER 2010                             Page: 24 of 264


training to taxi owners, rank managers, taxi drivers and conductors

to improve the quality of services provided by the taxi industry to

15 million commuters every day.



The Minister of Transport, Mr Sibusiso Ndebele, attended this event

and commended Santaco for demonstrating their understanding of

broad-based black economic empowerment and the co-operative

development policies of the ANC government. The Department of

Transport pledged R5 million towards the taxi academy.



The TR3 Vision 2020 will enable the taxi industry to realise its

potential as a true broad-based black economic empowerment sector in

transport with multibillion rand financial muscle. The ANC will

support efforts by the people to become the masters of their own

destiny.



                   DEATH OF BRITISH TOURIST ANNI DEWANI



                          (Member’s Statement)

Rev K R J MESHOE (ACDP): Speaker, the ACDP wishes to convey its

condolences to the husband and family of Anni Dewani, a British

tourist who was killed on Saturday night while on honeymoon with her

husband. Our sympathy goes to Mr Dewani and we pray that he will

find strength and comfort during this very difficult time.
16 NOVEMBER 2010                          Page: 25 of 264


The ACDP further appeals to the Minister of Tourism and all relevant

stakeholders to ensure that it becomes a requirement for tour

companies and guides to inform tourists about areas they can and

cannot visit at night, so that we do not have a repeat of this

unfortunate and tragic event.



We further call on the police to leave no stone unturned until they

find the murderers of Anni Dewani and for experienced detectives to

be given this case to ensure that the perpetrators are convicted by

our courts. A clear message must be sent to criminals out there that

the attacking and killing of tourists will not be tolerated. Thank

you.



       INVOLVEMENT OF POLITICIANS IN CONTRACTS WITH GOVERNMENT



                        (Member’s Statement)



Mr S C MOTAU (DA): Speaker, media reports suggest that the ANC, via

its front company, Chancellor House, is benefiting from the national

energy crisis again, through its recent purchase of a major Swazi

coal mine which is, in turn, apparently set to supply coal to

several power plants, including the new Medupi plant. The DA

believes that this amounts to a gross conflict of interest. It blurs

the lines between party and state, and we once again call on the ANC

to shut down Chancellor House.
16 NOVEMBER 2010                            Page: 26 of 264


Chancellor House is a front company that is doing nothing but enrich

the ANC and it is doing that through very questionable means. We

cannot have a situation where the ANC is able to benefit from an

energy crisis of its own making and its insider knowledge of state

dealings, in order to bankroll its own party financing and election

campaigns.



In April this year, the DA’s Chief Whip, Ian Davidson, submitted a

Private Members’ Bill to ban political parties from tendering and

contracting with general government. The Bill seeks to regulate the

awarding of government tenders in order to ensure that no business

entity in which a political party has an interest can tender with

government or parastatals.



This episode only re-emphasises the need for such legislation. Where

there is such provision in place in our law, a coal mine owned by an

ANC front company will not be permitted to contract with Eskom. I

thank you. [Applause.]



                         TUBERCULOSIS TREATMENT



                          (Member’s Statement)



Mr G LEKGETHO (ANC): Hon Speaker, the ANC welcomes the new

development of a potential drug treatment that has the ability to

simplify and shorten tuberculosis, TB, treatment to less than six
16 NOVEMBER 2010                          Page: 27 of 264


months. Currently, the drug is being tested for effectiveness,

safety and tolerability on patients at two centres, the Lung

Institute at the University of Cape Town and the TASK Research

Centre in Bellville.



If successful, the experimental regimen will offer a shorter,

simpler, safer and more affordable treatment option for multidrug-

resistant tuberculosis, MDR TB, an emerging global health threat.

This is going to be a significant advance for MDR TB patients, who

today must take multiple types of drugs - including injectables -

daily for up to two years.



The ANC supports and believes that it will assist and bring relief

to those who have been compelled to take treatment for longer

periods. This new treatment shortens the period of taking the

treatment, which is one of the main reasons for patients’

defaulting. I thank you. [Applause.]



               FEEDBACK ON VISITS TO SCHOOLS IN 2010



                        (Member’s Statement)



Mr N SINGH (IFP): Hon Speaker, at the end of 2009, correspondence

was sent from the Minister of Basic Education, Mrs Angie Motshekga,

Member of Parliament, to all Members of Parliament in this House,
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urging members of the House to visit schools at the beginning of the

2010 academic year.



I duly visited 10 schools over a three-day period and submitted a

comprehensive report of my findings to the Ministry on 14 April

2010. This report advised the Ministry on issues that required

urgent attention at these schools. I further requested in my

correspondence feedback from the Ministry on issues that I addressed

and the steps to be taken, so that I could conduct follow-up visits

towards the end of 2010.



To date, hon Speaker, and despite numerous requests by my office,

the Ministry of Education has not even responded to my April

correspondence, save for a telephonic call of acknowledgement, let

alone effected any changes to the above-mentioned schools as per my

request.



I submit that this, Mr Speaker, is administrative and political

negligence of the worst kind. I therefore urge the Minister of

Education to take immediate disciplinary and corrective action to

ensure that instances of negligence such as this do not occur again.

Thank you. [Applause.]



                   NEGLECT OF WORKERS AT PAMODZI MINES



                           (Member’s Statement)
16 NOVEMBER 2010                          Page: 29 of 264


Mr P D DEXTER (COPE): Speaker, Cope supports the call by the

National Union of Mine Workers and Solidarity, for Enver Motala the

lead liquidator, who was charged with winding up Pamodzi Mines, to

step down because of the social crisis caused at the mines which is

a result of his failed efforts.



Cope also supports the demands for Aurora to be taken to the Labour

Court for its failure to pay the salaries of its employees for the

past 18 months, leaving them utterly stranded. The situation that

has developed is an absolute travesty of justice. The government,

self-proclaimed champion of the workers and the poor, has done

nothing.



Reports suggest that R4 million’s worth of pension and provident

fund contributions deducted were not paid over to the relevant funds

and no pay-as-you-earn or unemployment insurance payments were made

to the authorities. Life cover policies were also cancelled as a

result of nonpayment of contributions by Aurora.



Both the Department of Labour and the Department of Mineral

Resources have failed to act against the company, which is headed by

politically connected individuals. Workers have been literally

mugged by the employer.



Furthermore, due to the neglect of management, the problem of acid

water has been exacerbated in the mines, and assets of the mines
16 NOVEMBER 2010                           Page: 30 of 264


have allegedly been stripped and sold off to pay the liquidators. As

the government looks the other way, the rich continue to be rich,

while the poor workers are left destitute. It’s a disgrace, Speaker.

[Applause.]



              AGM OF LAW SOCIETY OF NORTHERN PROVINCES



                        (Member’s Statement)



Mr J B SIBANYONI (ANC): Hon Speaker, the Law Society of the Northern

Provinces is commended for having held its annual general meeting on

13 November 2010 at Pilanesberg, Sun City. The opening session was

addressed by the Chief Justice, Mr Sandile Ngcobo. He said that the

attacks on the judiciary, either from academics, politicians or

political analysts, are a threat to the independence of the

judiciary.



At the AGM attorneys who have been practitioners for 50 years in

this noble profession, the legal profession, were recognised. The

AGM is commended for having grappled with the Legal Practice Bill

and the Constitution 18th Amendment Bill in its deliberations.



The Law Society of South Africa has submitted its views to the

Department of Justice regarding the Legal Practice Bill. The Justice

Committee looks forward to receiving the Law Society of the Northern

Provinces’ resolutions and its submissions before the above-
16 NOVEMBER 2010                            Page: 31 of 264


mentioned Bills are debated in Parliament. These Bills have been

prioritised by all interested stakeholders. [Applause.] Thank you,

Speaker.



                   ADMINISTRATION OF COMMUNITY AFFAIRS

              IN THE NORTH WEST PROVINCIAL GOVERNMENT



                          (Member’s Statement)



Mr J R B LORIMER (DA): Speaker, provincial governments are given

power over traditional communities. That power carries a duty of

trust that the best interests of traditional communities will be

followed at all times.



There is one instance where that duty of trust is being flagrantly

violated. The North West provincial government has allowed the

situation where the Bapo ba Mogale traditional community faces

losing out on a massive business deal that could help lift many of

its 35 000 members out of poverty.



The North West provincial government has placed the affairs of the

community under administration. The administrator’s appointment is

being challenged in court. In the meantime the premier refuses to

act. The community’s affairs have been left to stagnate. Community

bills are not being paid and decisions involving the administration

of the community’s wealth are not being taken. One result is that
16 NOVEMBER 2010                          Page: 32 of 264


the community may now lose out on being able to increase its share

in a potentially lucrative Pandora platinum mine.



The leadership of the community believe officials want to keep

control of the community’s wealth, so that they can give dodgy

contracts to their friends. The DA has appealed directly to the

premier, but the premier has not acted. I have written to the

Minister, but he has done nothing. I am sorry to see that the

Minister is not here - perhaps he’s out buying flowers! This begs

the question: do these elected officials care about their

responsibilities to traditional communities? Aren’t they bothered by

reports of corruption? South Africans will draw their own

conclusions. They are not likely to be kind. [Applause.]



       ACCESS TO ELECTRICITY FOR COMMUNITIES IN KWAZULU-NATAL



                        (Member’s Statement)



Umntwana B Z ZULU (ANC): Somlomo,uhulumeni we-African National

Congress oholwa ngumhlonishwa uMongameli uMsholozi, usefinyelele

nakubantu abahlala ezindaweni zasemakhaya ukubalethela ukukhanya

kwentuthuko. Umhlonishwa woMnyango Wezamandla,umhlonishwa uPeters

usebenza ngokukhulu ukuzinikela nokuzikhandla ezindaweni zasemakhaya

kwaNongoma, lapho esefakele khona ugesi ezigodini eziningi

ezahlukeneyo.
16 NOVEMBER 2010                          Page: 33 of 264


Ukwazile ukufakela ugesi imizi eyizi-2569 okumanje ikhanyisa ugesi

kule ndawo. Imali uhulumeni aseyifakile ukwenza lo msebenzi omkhulu

noncomekayo iyizigidi ezingama-R35. Abantu abaningi abahlezi

emakhaya bengasebenzi bakwazile ukuthola amathuba emisebenzi

ngenkathi kufakelwa ugesi emakhaya abo. Izingane ezifunda ezikoleni

ezikulezi zindawo nazo sezizokwazi ukusebenzisa amakhompyutha

ukufundisa izingane ebezingakaze zilithole ithuba lokufundiswa

ezobuchwepheshe.



Abantu bayancoma bathi bayakubona okushiwo nguMongameli uMsholozi

ukuthi ufuna intuthuko ifinyelele nasezindaweni zasemakhaya.

Ukukhanya kufike nohulumeni we-African National Congress kwaNongoma.

Imisebenzi yakhe yentuthuko iyabonakala. Inselelo enkulo uMnyango

obhekene nayo ukwebiwa kukagesi yilabo abangafuni ukuwukhokhela.

Lokhu kukhinyabeza imizamo emikhulu kahulumeni yokuqhubeka afakele

ugesi kulabo abasawudingayo. Ngiyabonga Somlomo. (Translation of

isiZulu member’s statement follows.)



[Prince B Z ZULU (ANC): Speaker, the government of the African

National Congress, which is led by the hon President, Msholozi, has

also reached out to the people who live in the rural areas to bring

them the light of development. The hon Minister of the Department of

Energy, hon Peters, has worked with great dedication and commitment

in the rural areas of Nongoma, where she has supplied electricity to

many districts.
16 NOVEMBER 2010                          Page: 34 of 264


As of now, she has managed to provide electricity to about 2569

households in this area. The government has allocated a sum of R35

million to do this commendable job. Many unemployed people benefited

during the electrification of their homes. The children attending

schools in these areas will now be able to use computers, and those

learners, who have never had the opportunity, will be exposed to

technology.



People are appreciating it and are saying that they can now see what

the President, Msholozi, means when he says that he wants the

development to reach the rural areas. The improvement came with the

government of the National Congress in Nongoma. Her developmental

works are evident. The great challenge faced by the department is

the stealing of electricity by those who do not want to pay for it.

This hinders the government’s great efforts of continuing to supply

electricity to those who need it. Thank you, Speaker.]



       ACCESS TO ELECTRICITY FOR COMMUNITIES IN KWAZULU-NATAL



                       (Minister’s Response)



The MINISTER OF ENERGY: Speaker, I rise to thank the hon Zulu for

taking the opportunity to raise in the House the matter of the

electrification of the area of Nongoma, and also to convey, through

him, a message to the entire community of KwaZulu-Natal that we are

aware that there are major backlogs in that province, and in
16 NOVEMBER 2010                          Page: 35 of 264


particular in the areas around Ulundi and Nongoma, which do not have

electricity.



We have plans to continue with the electrification programme. As you

know, government set itself the target of ensuring access to

electricity for all formal households by 2012 and universal access

by 2014. We believe that, with the support of communities and

Members of Parliament like him, we will be able to meet the target.



Hon Zulu raised the important point of paying for electricity. I

want to indicate that, as members of portfolio committees, you

should also help the municipalities to get the necessary amounts of

money that they are owed by consumers of electricity like government

departments, individuals who can afford it, and industry and

businesses.



The challenge we have is that the lack of payment for electricity

results in the inability of municipalities to pay Eskom and then

Eskom ends up cutting off the supply to communities and to

municipalities in particular. The end result is that those

unfortunate members of the community who are supposed to have access

to free basic electricity cannot have access to it because the total

supply has been cut off.



There are quite a number of government departments that owe

municipalities and Eskom. Through this House, I would like to make a
16 NOVEMBER 2010                          Page: 36 of 264


special appeal to them to pay. You will remember that earlier this

year electricity to communities in the Free State was cut off,

primarily because of the huge debts that state-owned enterprises, as

well as government departments, had to pay to municipalities. I want

to say to hon Zulu that we are on track to ensuring that we

popularise the need for payments, but we also need your support to

ensure that. Thank you. [Applause.]



              AGM OF LAW SOCIETY OF NORTHERN PROVINCES



                       (Minister’s Response)



The DEPUTY MINISTER OF JUSTICE AND CONSTITUTIONAL DEVELOPMENT:

Speaker, I would like to associate myself with the statement made by

the hon Sibanyoni in relation to the annual general meeting, AGM, of

the Law Society of the Northern Provinces. I want to say that we

agree with the statement made by the Chief Justice at that meeting,

that South Africa’s courts need to improve efficiency in order to

promote access to justice, that the cumulative effect of trial

delays is denial of justice, and that we need to re-examine the

fundamentals of our justice system.



In that regard, we thank the Law Society of the Northern Provinces,

together with the entire organised legal profession, for the very

constructive inputs that they have made in the development of the

Legal Practice Bill and the Superior Courts Bill. Both pieces of
16 NOVEMBER 2010                             Page: 37 of 264


legislation are designed exactly to improve the efficiency of our

courts and access to justice.



We would also like to say that we are working together with and in

support of the judiciary, led by the Chief Justice, to ensure that

this is achieved through the implementation of, amongst others,

judicial case management and improved management of our courts

generally, as well as embarking upon a review of our civil justice

system. I thank you.



               KILLING OF BRITISH TOURIST ANNI DEWANI

               CONDOLENCES TO FAMILY OF SHRIEN DEWANI

                   DEATH OF BRITISH TOURIST ANNI DEWANI

             ARMS DEAL INVESTIGATION BY BRITISH COMPANY

    FESTIVE SEASON CRIME-FIGHTING CAMPAIGN OPERATION DUTY CALLS

                        CASH INJECTION INTO ESKOM

                         TUBERCULOSIS TREATMENT



                          (Minister’s Response)



The MINISTER OF SCIENCE AND TECHNOLOGY: Hon Speaker, I think we

should all join the hon Gumede, the hon Ndlovu and the other hon

members who have referred to the tragic murder of the young British

tourist who was visiting our country. The killing of any person is a

crime and a tragedy. In this particular instance we are saddened

that this has dented the positive image that South Africa has
16 NOVEMBER 2010                          Page: 38 of 264


accrued in recent months, to which the hon Gumede referred. So, we

join all members who have expressed condolences and sadness at this

tragic event.



Secondly, with respect to the robust statement by the former

Minister of Defence, the hon Lekota, the leader of Cope, we would

all, of course, agree with the hon member that those who have

transgressed must be dealt with by the law. However, we believe that

we would benefit greatly if the hon member who provided robust

declarations of no transgression previously would come forward with

what he knows so that action can be taken against those who have

transgressed. [Applause.]



We would agree with the hon member from the Portfolio Committee on

Police that indeed we must all support the police in the anticrime

campaign that they have launched for the festive season and that all

of us should become active supporters of members of the Police

Service as they seek to make our country and our communities and

streets safer.



On the matter of Eskom and the allocation referred to by the leader

of the DA, I hope, hon Speaker, that you will allow my hon colleague

the Minister of Public Enterprises, when he so requests, to make a

statement to the House so that this matter can be properly

clarified, because I believe that that is what is best to address

this matter.
16 NOVEMBER 2010                          Page: 39 of 264


Finally, on the matter of research with respect to TB treatment,

which was raised by colleagues from the ANC, this is indeed a very

exciting and positive breakthrough. We hope the scientists will be

successful in finding a means of treating TB that will assist us to

eradicate this blight on many, many communities and members of our

society. Thank you. [Applause.]



                     CASH INJECTION INTO ESKOM

      INVOLVEMENT OF POLITICIANS IN CONTRACTS WITH GOVERNMENT



                       (Minister’s Response)



The MINISTER OF ENERGY: Hon Speaker, I wish to apologise for

omitting to respond to the statement on the R20 billion guarantee. I

want to reassure members of this House that this is not additional

funding, as was indicated by the DA leader. It is a R20 billion

guarantee from government to allow us, Eskom, to raise loans from

the market. This will allow for the building of the Kusile Power

Plant, and we will therefore be able to bring about the security of

the supply of electricity to South African industry and households.



I want to ask, since I know that the DA is not a member of Cabinet

and none of them is a Minister, which Ministers were not consulted,

because the support that government lent to Eskom through Cabinet

was a product of the Department of Public Enterprises, DPE, the

National Treasury and the Department of Energy. We co-authored the
16 NOVEMBER 2010                          Page: 40 of 264


memo which solicited the support of Cabinet, which was duly given,

as reported by the GCIS Director-General last week. So, I just want

to put that to rest.



I also want to say that the issues ... [Interjections.]



The SPEAKER: Order! Hon Minister, take your seat. There is a point

of order.



The LEADER OF THE OPPOSITION: Hon Speaker, the Minister is asking me

a question. Am I entitled to respond to her question about which

Ministers were not asked or informed? In her response she asked me a

question.



The SPEAKER: It is a rhetorical question, hon member. [Laughter.]

Continue, hon Minister.



The MINISTER OF ENERGY: I want to say that the issue of the link of

Chancellor House to Eskom is like a record that has got stuck, on

one note. We believe that that matter has been addressed and there

is no way that we can keep on bringing it back. Chancellor House is

an independent company that has a right to do business with any

entity that they want to ... [Interjections.]



The SPEAKER: Order!
16 NOVEMBER 2010                          Page: 41 of 264


The MINISTER OF ENERGY: ... and no amount of howling will stop

Chancellor House from doing business in this country. [Applause.]



   16 DAYS OF ACTIVISM FOR NO VIOLENCE AGAINST WOMEN AND CHILDREN



                            (Statement)



The MINISTER OF WOMEN, CHILDREN AND PEOPLE WITH DISABILITIES:

Mr Speaker, hon members, we are making this statement against the

background of our country’s having been affected by a number of

shocking incidents of murder, abuse and rape of women and children.



Just this weekend, a woman tourist from the United Kingdom was

killed in what is believed to be a hijacking incident in Gugulethu.

Over the past few weeks, we visited the scene of the gruesome murder

of women and children at Ntshongweni and Marianhill in KwaZulu-

Natal. We further visited the family of a young schoolgirl who was

raped at her school, allegedly by fellow learners. There is also

information about the rape of an 11-year-old child in Cape Town.



We want to express our deepest sympathy to the family of the

deceased British citizen, especially her husband, a newlywed, and

also to the families of the deceased in Ntshongweni and Marianhill.
16 NOVEMBER 2010                           Page: 42 of 264


We are receiving reports of an increase in the number of children

abandoned by their parents. Equally, we are concerned about missing

children who might be victims of child trafficking.



All of these incidents require us to approach the 16 Days of

Activism for No Violence against Women and Children with much more

resolve and determination, in order to mobilise all the people of

our country to act against abuse during this time.



The 16 Days of Activism for No Violence against Women and Children

is an international initiative endorsed by the United Nations. It

takes place annually, beginning on 25 November, which is

International Day of No Violence against Women and Children. It runs

to 10 December, which is International Human Rights Day. Other key

commemorative days during this period include World Aids Day on

1 December and International Day for Persons with Disabilities,

which falls on 3 December of every year.



In the Southern African Development Community, SADC, region, the

campaign has gained significant momentum through the adoption of the

Addendum on the Prevention and Eradication of Violence against Women

and Children by the SADC heads of state. Since 1999, our government

has run this campaign and, in addition to women, it has included

issues relating to violence against children.
16 NOVEMBER 2010                          Page: 43 of 264


This campaign focuses primarily on generating an increased awareness

of the negative impact of violence on women and children, as well as

on society as a whole. This campaign has served as the main social

mobilisation tool against the prevalence of acts of abuse against

women and children in South Africa.



Over the past 11 years, the campaign has grown exponentially, making

it the second most known government event in South Africa, after the

state of the nation address, according to a Government Communication

and Information System Tracker Survey. The Tracker Survey also

indicates a significant rise from 9% in 2003, to 33% in 2009, in

public awareness levels in rural areas.



It is also worth noting that the 16 Days of Activism Campaign is

again nominated for this year’s Public Sector Excellence Award,

which is supported by Avusa, the Brand Leadership Academy and TNS

Research Surveys.



The campaign also serves as a catalytic mechanism to support

government outcomes on gender equality and the protection of

children and other vulnerable groups. The campaign cuts across the

five key priorities of government, with a particular focus on crimes

committed against women and children.



While the levels of awareness have been increased, we face the

reality that child abuse, murder, rape, statutory rape, domestic
16 NOVEMBER 2010                          Page: 44 of 264


violence and trafficking of women and children continue to occur at

a rate that is unacceptably high.



The latest crime trends report of the SA Police Service for the

period April 2009 to March 2010 indicates a decrease of 4,4% in the

ratio of sexual offences. There is, however, a concern with regard

to increases in the incidence of attempted murder, sexual offences

and murder of children in particular. According to various previous

analyses pertaining to crimes against children according to age,

most of the crimes are committed against children between 15 and 17

years old. However, it is disturbing to notice that there are now a

significant number of cases of sexual offences affecting children

below the age of 15, including those aged between zero and 10 years.



In implementing the campaign this year, we have taken into

consideration the outcomes of the Ten-Year Social Impact Assessment

and the 2009 Stakeholders Summit, where various stakeholders

assessed the campaign and made recommendations going forward. This

is where we came out with the 365 days plan of action on violence

and abuse of women and children.



The corporate image and theme of the campaign has been well

established in society and amongst participating stakeholders

nationally. It is for this reason that we continue with the theme

“Don’t look away; act against abuse!”
16 NOVEMBER 2010                           Page: 45 of 264


The international theme of the campaign this year is: “Structures of

violence: Defining the intersections of militarism and violence

against women”. We will co-operate with the Departments of

International Relations and Cooperation, and Defence and Military

Veterans in regard to incorporating this international theme into

our programmes and structures and in relation to South African

peacekeeping missions and other foreign policy interactions abroad.



We have already had some activities which serve as a build up to the

16 Days of Activism. We had the celebration of National Children’s

Day in Rustenburg in the North West on 6 November, where we launched

the campaign to improve access to sanitary towels for vulnerable and

orphaned girls.



Last week, we launched the Disability Awareness Campaign which

should also highlight the vulnerability to abuse of women, children

and people with disabilities. The campaign will culminate in a

Disability Summit to be held in Bloemfontein from 2 to 3 December in

order to finalise the process of domesticating the UN Convention on

the Rights of Persons with Disabilities.



On 20 November in Daveyton, Gauteng, the Ministry, in partnership

with the SA National Aids Council, Sanac, Ekurhuleni Metro and other

civil society organisations, will co-ordinate the commemoration of

International Men’s Day on the twenty-first anniversary of the

adoption of the UN Convention on the Rights of the Child.
16 NOVEMBER 2010                          Page: 46 of 264


The key events of the 16 Days of Activism include the media launch

that will take place here in Parliament on 23 November 2010.

Together with other Ministers, we shall highlight the response to

the challenge of the abuse of women and children. We will be

outlining our focus of this year’s campaign.



The opening event takes place in Khayelitsha, in Cape Town, on

25 November, and will focus on the links between alcohol, substance

abuse and the scourge of the abuse of women and children. This event

will be addressed by our President, His Excellency, President Jacob

Zuma.



From 25 November to 10 December there will be a number of activities

focusing on various aspects of the challenge of violence against

women and children. A calendar of these events organised by

government, civil society and other sectors will be published on our

website.



The closing event on 10 December takes place in KwaZulu-Natal,

where, we hope, we will be able to relook at the horrible incidents

of the murders of innocent families and children in Ntshongweni and

Marianhill.



Our focus will be on profiling the whole package of victim support

services that government and other partners are implementing to
16 NOVEMBER 2010                          Page: 47 of 264


mitigate the impact of violence on women and children. The closing

event of the campaign will be addressed by His Excellency, Deputy

President Kgalema Motlanthe.



It is therefore my belief that we will be able to take the 16 Days

of Activism campaign to even higher levels this year, as we

implement the 365 days plan of action adopted after the 10-year

review of the campaign last year. Through this plan, we shall

address key factors underlying the high prevalence and vicious

nature of the recent incidents of violence against women and

children.



It is my sincere hope that, as Parliament rises this week, all

parliamentarians will use their constituency period to highlight the

challenge of abuse of women and children in our communities. Let us

use this opportunity to encourage reporting, effective investigation

and appropriate interventions against incidents of violence and

abuse against women and children.



Let us visit police stations in our constituencies and speak to

those in authority to find out their levels of understanding,

sensitivity and state of readiness to tackle this scourge that faces

our community.



Let me take this opportunity to invite the Members of Parliament,

especially men in the House, to participate in the international
16 NOVEMBER 2010                            Page: 48 of 264


Men’s March on 20 November in Daveyton, Ekurhuleni. It is a very

important day on which parents can teach boys, their sons, to

respect girls from their formative years. The central message for

that day must be that real men don’t rape; real men don’t beat their

wives, and real men don’t abuse children.



I therefore hope that we shall ensure that we pass on these messages

to our communities, organisations, volunteer groups, traditional

leaders, religious leaders and all in our communities, to ensure

that we form a formidable army of committed citizens of this country

that will speak with one voice and say to the whole country: let us

not look away; let us all act against the abuse of women and

children.



I would also like to caution some of our journalists and media

houses to remember to protect our children. They also have rights;

they also have the right to privacy. We want to ask them to protect

the children from unnecessary exposure, especially those that have

been highly traumatised and are still under age and undergoing

counselling because of the brutality of the rape and abuse. We

believe that members of the press are also parents and patriots and

will therefore put the interests of our children first, before they

go out and look for a scoop for the front page.



It is a matter of concern that details of the video which was taken

at Jules High School were published in what is tantamount to
16 NOVEMBER 2010                          Page: 49 of 264


promoting child pornography in our country. This may have a

devastating impact on children who are already traumatized by these

occurrences.



In closing, allow me to say that a society that does not respect its

women and children is a dysfunctional society. As South Africans,

let us declare that we refuse to be part of such a society and that

we do care for women and children. Let us all march together,

forward against woman and child abuse. Thank you.



Mrs D ROBINSON: Hon Deputy Speaker, Ministers, members and also our

special guests in the gallery, Minister, I would like to

congratulate you on your appointment to office. I trust that our

relationship will be a cordial one and that we will work together in

the interests of women, children and persons with disabilities.



I’m convinced that we can put some action to the platitudes that

have been uttered in the past year of inaction. Apart from

expressing sympathy, we need to see action and change. The Ministry

needs real leadership to promote the interests of women, who are

still denied the rights that they are guaranteed by our Constitution

and the many protocols that have been signed. We will hold the

Ministry accountable for implementing a human rights culture, for

gender rights are human rights.
16 NOVEMBER 2010                          Page: 50 of 264


A lot of women have improved in many ways but, 16 years into

democracy, why do we still need the 16 Days of Activism for No

Violence against Women and Children? While women rightly celebrate

their new freedom, they do not feel liberated or empowered in every

sphere of life. In their homes, as wives and daughters, domestic

violence against women is far too common. In their neighbourhoods

they are vulnerable to rape and attack, and when they turn to the

police or to the courts for protection, their concerns are often

shrugged off. Many victims of crime point out that they are

victimised twice: first by the criminals and then by the criminal

justice system.



The much acclaimed Victims’ Charter was meant to take care of the

needs of all victims, but government is failing to ensure that the

rights are upheld. Women do not always have access to the special

Family Violence, Child Protection and Sexual Offences Units or

victim support rooms.



There is a desperate need for psychologists and social workers at

police stations, at courts and in communities to deal with the

scourge of rape and abuse of women, children and babies. Not only

are the victims traumatised, but also the families who witnessed the

atrocities, as well as the police, doctors and nurses who have to

deal with the indescribable scenes they have to witness. At eleven

o’clock last night I heard of a three-month-old child that had been

victimised and abused in the most horrendous way.
16 NOVEMBER 2010                           Page: 51 of 264


I quote Colleen Lowe Morna of Gender Links, who said:



   ... we (need) to do much more to reach out to men who are

   imprisoned by the emotions that society, for whatever reason,

   has never allowed them to process.



Many of our families are dysfunctional and counsellors are needed.

This cannot be left to the NGOs alone, who are already suffering

from lack of funding. Government has to take financial

responsibility for providing the funds to deal with the problems. So

I appeal for more gender-sensitive budgeting.



The lack of maintenance payments is often a trigger for family

violence. Why should women have to go to court to beg that fathers

pay maintenance for their children? The courts are often grossly

understaffed, and justice is not served.



I challenge all hon Ministers and members to behave with honesty, to

set the example, to pay up and to encourage others to take

responsibility for the children that they fathered. In a modern

constitution there is no place for patriarchal attitudes that regard

women as mere objects to be used at the pleasure of men.



Probably the single most important marker of a country’s progress is

how it treats its women. If its women have the same education as its

men, and are given the same opportunities and status, the country
16 NOVEMBER 2010                          Page: 52 of 264


will prosper and advance, but we need to break down the patriarchal

attitudes for this to happen.



“Finding a way to preserve traditional wisdom while promoting human

rights is the challenge of our age.” Those are the words of Helen

Zille. I agree. Don’t look away; act against violence! These 16 days

serve as an important reminder of how far we still have to go. Let

us put words to action. Let us not have T-shirts, let us not have

caps, let us have ongoing action. Feasting is not enough; we need to

work hard. Thank you. [Applause.]



Mrs M A A NJOBE: Hon Deputy Speaker, may I begin by congratulating

the Minister hon Lulu Xingwana on her appointment as Minister in the

Department of Women, Children and People with Disabilities. We wish

her luck and success in her work. [Applause.]



Hon Deputy Speaker, once again South Africans and the international

community will campaign for 16 days, calling for the elimination of

all forms of violence against women.



Violence against women takes many forms: sexual assault, wife

beating, prostitution, trafficking, sexual violence, sexual

harassment and date rape. Violence against women also takes many

other forms such as psychological, emotional and financial abuse,

and also intimidation. All are unacceptable violations of human
16 NOVEMBER 2010                           Page: 53 of 264


rights. Together they form a huge obstacle to gender equality and

genuine human progress.



In South Africa, the sexual violation of children, women in general,

women living with HIV/Aids, and lesbians is endemic. This heinous

crime does not end there but, in some instances, leads to murder.

The latest case is that of the murder of the British bride on

honeymoon in South Africa. It’s sad. It is very sad.



Women in South Africa are not safe anywhere. Recently, a doctor was

gang-raped at her workplace and a schoolgirl was drugged and raped

by school pupils. The sad part about the latter incident is that the

alleged perpetrators were set free by the police because of

questions from her peers about whether it was rape or not, as she

was drunk. The question is: How could she not be drunk when she was

drugged?



Women are scared to report sexual violence because they will be

insulted and victimised in public. Women’s rights are under threat

and something needs to be done urgently.



Cope believes women have a right to report sexual violence and

harassment without fear, no matter who the perpetrator is. It is

also critical that women are able to speak out and share their ideas

in order to challenge attitudes and beliefs that sustain violence

against women.
16 NOVEMBER 2010                           Page: 54 of 264




Cope also calls for action to defend women’s rights to freedom of

expression and information which are the basic building blocks for

women to be able to come together, organise for change, inform

public debate, define culture, build safe spaces and end violence

against women.



Cope invites all to take action to defend women’s rights and the

gains that we have made so far. I thank you. [Applause.]



Ms S P LEBENYA-NTANZI: Madam Deputy Speaker, the IFP strongly aligns

itself with the objectives of the 16 Days of Activism for No

Violence against Women and Children campaign. The reason we do this

is primarily because, in spite of the wonderful strides we have made

as a country in moving away from the horrors of this country’s

apartheid past, and in spite of the strides we have made in

embracing a culture of human rights and democracy, we note with

regret that women and our children are still at the receiving end of

violence, meted out to them by those who should be protecting them.



Even though this year is the 10th anniversary of this campaign,

rampant and unforgivable violence against women and children is

indeed a cause for us to hang our heads in shame. We recognise that

the objectives of this campaign should not be confined to only

16 days, but should be pursued every day until the battle is won.
16 NOVEMBER 2010                          Page: 55 of 264


The campaign should be viewed as a means of pricking the consciences

of our people so that they take up the fight to defeat this ugly

phenomenon. We call on all the men and women of our country to join

hands in defeating this demon which continues to corrode and blight

the very soul of our nation. I thank you, Madam Deputy Speaker.

[Applause.]



Mrs S U PAULSE: Madam Deputy Speaker, the campaign of 16 Days of

Activism for No Violence against Women and Children is a very

important period on our events calendar. It proves that we are

united with the rest of the world.



Geweld teen vroue en kinders moet tot ’n einde kom. Die OD wil

beklemtoon dat dié soort geweld in werklikheid ’n skending van

menseregte is. Die demonstrasie ter ondersteuning van vroue in die

wêreld is nie genoeg nie, maar ongelukkig is dit die enigste tyd van

die jaar wat aan dié saak gewy word. (Translation of Afrikaans

paragraph follows.)



[Violence against women and children has to end. The ID would like

to emphasise that this kind of violence is in fact a violation of

human rights. The demonstration in support of women the world over

is not enough, but unfortunately this is the only time of the year

dedicated to this cause.]
16 NOVEMBER 2010                          Page: 56 of 264


Violence against women is not only common but often fatal. It is an

extreme manifestation of gender inequality and human rights

violation. It is not a South African problem or shortcoming; it is,

in fact, a global problem.



Die uitskakeling van alle vorme van geweld teen vroue en kinders

moet nie ’n jaarlikse demonstrasie wees nie; dit behoort ’n

prioriteit van hierdie regering te wees, omdat ’n groot getal vroue

in die Suid-Afrikaanse nasionale Parlement verteenwoordig word.

(Translation of Afrikaans paragraph follows.)



[The elimination of all forms of violence against women and children

should not be an annual campaign; it ought to be a priority for this

government, because a large number of women are represented in the

national Parliament of South Africa.]



The ID strongly believes that a strategic way to prevent violence is

to introduce and enforce laws that protect women. In doing so, there

must be no room for tolerance of acts of violence against women and

children. I thank you. [Applause.]



Mr N M KGANYAGO: Deputy Speaker, the UDM calls on the nation to

mobilise in support of this worthy campaign. In my brief time I

would like to make two points. Firstly, the UDM expresses its

outrage and dismay at the recent brutal killing of a British woman

on honeymoon in South Africa. Her death, like the recent Jules High
16 NOVEMBER 2010                            Page: 57 of 264


School gang rape incident, emphasises the brutality and violence

that women and children face in this country. The men who commit

these atrocities must be found and punished. Every such incident

must be dealt with swiftly and unequivocally. Enough is enough!



Secondly, this is another year in which this campaign will be

conducted without the late hon Cheryl Gillwald at the helm. We would

like to make use of this opportunity to salute this activist whose

energy and dedication was a driving force behind the establishment

and growth of the campaign. We hope that the campaign will continue

to grow from strength to strength and serve as a monument for her

and many others who are fighting against gender violence. I thank

you. [Applause.]



Mnr P J GROENEWALD: Agb Adjunkspeaker, dit is met afgryse en skok

dat ’n mens in die media moet lees van skoolkinders en skoolmeisies

wat verkrag word, en die dade dan gerieflikheidshalwe op video

opgeneem en op die internet verkoop word.



Dit is met afgryse en skok dat ’n mens moet lees van ’n klein baba,

Marzaan Kruger, wat wreed deur haar aanvaller sodanig vermik is dat

sy breinskade opgedoen het. Dis ’n kind wat nog nie eens kan praat

nie; ’n kind wat nie in ’n hofsaak getuienis kan lewer nie.

Ons sê die gemeenskap het siek geword. Die vraag is, wat doen ons as

ouers om die voorbeeld te stel en ons kinders reg op te voed? Die

standpunt van die VF Plus is duidelik. Ons gemeenskap het so siek
16 NOVEMBER 2010                          Page: 58 of 264


geword dat, as dit by kinderverkragters en moordenaars kom, ons die

terugbring van die doodstraf bepleit, want dit sál werk om ons

gemeenskap weer reg te kry. Ek dank u. (Translation of Afrikaans

speech follows.)



[Mr P J GROENEWALD: Hon Deputy Speaker, it is with shock and horror

that one must read in the media of schoolchildren and schoolgirls

who are raped and that the rapes are then video-taped and sold on

the Internet.



It is with shock and horror that one must read of a little baby,

Marzaan Kruger, who had been maimed so brutally by her attacker that

she was left brain-damaged. This is a child who was too young even

to speak; a child who cannot give evidence at a trial.



We are saying that the community has become ill. The question is:

What are we as parents doing to set an example and to give our

children the correct education? The argument of the Freedom Front

Plus is very clear. Our community has become so ill that if it comes

to the rapists and murderers of children, we are pleading for the

reinstitution of the death penalty, because that is the only way to

cure our community. I thank you.]



Rev K R J MESHOE: Deputy Speaker, the debate on 16 Days of Activism

for No Violence against Women and Children today takes place under

the shadow of the tragic killing of a newlywed British tourist who
16 NOVEMBER 2010                          Page: 59 of 264


was on honeymoon with her husband. The ACDP is concerned that this

criminal act may have a negative impact on the number of tourists

that we are expecting in our country this year.



We believe that more should be done to stop the unabating sexual

assaults and violence against women and children in our country. We

also believe that we must move away from 16 days of activism to

365 days of activism against all forms of violence in our country.

As the ACDP has stated in the past, it is time for government to

move beyond trying to create awareness; it needs to start solving

the problem.



If government wants to see results in their fight against violence

against women and children, we recommend that the following should

also be done. Firstly, they must ensure that minimum sentencing

legislation for convicted abusers is applied. Secondly, they must

provide courts and personnel to deal speedily with these issues.

Lastly, they must provide better training for police, and better

forensic services and victim care centres. I thank you. [Applause.]



Mr R B BHOOLA: Madam Deputy Speaker, women and children are

subjected daily to traumatisation and abuse. The devastating rise of

criminal activity is becoming a negative force, destructive to

building a caring and peaceful society. Women are, more importantly,

involved every day of their lives. They have become victims of

barbaric behaviour.
16 NOVEMBER 2010                          Page: 60 of 264




I agree with you, hon Minister, that all the incidents that have

been mentioned, including the two rape incidents of the elderly in

Chatsworth, are indeed heartbreaking. The perpetrators must face the

strong arm of the law. It is incumbent upon all of us, hon members

of this House, to ensure the safety, security and protection that

are truly desired by all.



The MF says: “Creative communities are progressive communities.” We

call on all to fight and put an end to physical, social and mental

abuse endured by all women and children. The campaign must be

intensified throughout the year. I thank you. [Applause]



Mr K J DIKOBO: Deputy Speaker, the past few weeks have witnessed a

rise in the number of incidents of the violation of the rights of

children and women. We were shocked by reports of the alleged gang

rape of a schoolgirl. Even more shocking were reports that the

incident had been videotaped and that her teachers had laughed at

her, saying that she deserved it. There were many other reports,

including that of the rape of a Bloemfontein doctor.



We are worried that society may gradually get used to such reports

and accept the abuse and rape of women as part and parcel of

everyday life. That is why Azapo supports the launch of 16 Days of

Activism for No Violence against Women and Children, as it will go

some way towards resensitising South Africans. Our message to men
16 NOVEMBER 2010                            Page: 61 of 264


and young boys is: Real men do not abuse; they protect and love

women. Thank you. [Applause.]



Ms B N DLULANE: Sekela-somlomo, mandithabathe eli thuba ndivuyisane

noNkosazana Xingwana ngokunikwa lo msebenzi umkhulu kangaka

wokukhokela eli sebe. Sikho sonke, siza kukuxhasa. [Deputy Speaker,

let me take this opportunity to congratulate Ms Xingwana for being

given this important task of being the Minister of this department.

We are all here and we will support you.]



Hon Deputy Speaker and hon members, we are urged this afternoon, as

we have been urged for the past 11 years, not to look away, but to

act against abuse. For most of the past few weeks the news headlines

that have captured the attention of the entire nation have revolved

around unspeakable acts of violence against not only women, but also

children. The acts of rape committed against helpless old women,

young women whose lives are negatively impacted upon, and vulnerable

children who are placed under the care of their relatives,

unfortunately seem to be the order of the day in our communities.



Hon members do not need to be reminded of the plight of the 12 women

who fell victim to a serial rapist in Johannesburg, the two women

who were raped in a temple in Chatsworth, Durban, and the girl child

who was raped by her grandfather in Balfour, an incident of horror.
16 NOVEMBER 2010                          Page: 62 of 264


What is clearly intolerable is the lack of action by school

authorities and teachers who have been made aware of rape, violence

and intimidation involving young men and schoolgirls, but have done

nothing to stop these evil deeds. We call on our government, civil

society and the private sector to take harsh action against the

school authorities and teachers who are implicated in these cases,

so that we can send a strong, clear message that we shall not

tolerate any form of violence and abuse against anyone, especially

women and children, who are the most vulnerable members of our

society.



A few lessons can be learned from the events of these past few days.

Every day we are faced with some form of sexual and physical

violence, victimisation, abuse and disrespect directed at women and

children, which has the impact of wearing them down. The question we

have to ask ourselves is whether or not we as individuals are to

blame for perpetrating many of these actions, and how we offer

support to those amongst us who are suffering. Related to that, we

should be asking ourselves how far we go in celebrating successes

achieved by women, especially girl children, as well as how we

encourage each other and rally around those amongst us who are

striving to achieve something better.



Today, as we prepare ourselves to respond to the call made by the

Minister, hon Xingwana, we have to congratulate members of the SA

Police Service on the sterling work done by them in apprehending a
16 NOVEMBER 2010                          Page: 63 of 264


suspected serial rapist outside Durban on Friday. The SA Police

Service were able to achieve this through the assistance of the

members of the public who provided information on the alleged serial

rapist. The participation of community members can be made possible

by, for example, creating neighbourhood watches in all communities.



When putting emphasis on the theme for this year’s campaign - which

is, “Don’t look away; act against abuse!” - all of us are called

upon not to watch from the sidelines and do nothing, but to speak

out and take a stand. When we hear screams and shouts of abuse

around us, we must make it our business to act.



There are many organisations and activists who are selflessly

involved in mobilising men to fight violence against women and

children. In many instances these men and women are working hard,

away from the limelight and with inadequate resources. I will

mention only a few of them today, but there is no shortage of

information about these organisations and the work that they do.



The Brothers for Life, with their slogan “Yenza Kahle” [Do the right

thing] send their message to us on television all the time. Sonke

Gender Justice, who say, “One Man Can” and can be seen during

episodes of the soapie Generations on television, is another such

organisation. There is also Hearts of Men, whose project is aimed at

lifting men out of unemployment and poverty hands-on, and which

teaches young men and fathers not to perpetrate violence against
16 NOVEMBER 2010                          Page: 64 of 264


women. Last but not least there is the Movement for Good, whose

rallying philosophy is, “It starts with you.”



The role of Parliament and its members, in particular the role and

responsibility of male parliamentarians, is of outmost importance in

upholding and taking forward the seeds that have been sown by these

organisations. Of equal importance are the role and responsibilities

of female parliamentarians in speaking out about the abuse of women

and children in all spheres of our lives and interactions. The

responsibility that must be taken up by all Members of Parliament is

also to find ways of strengthening support to men’s groups in order

to sustain the work that they do.



The activities supporting the 16 Days campaign have been

communicated to you today. It is incumbent upon each of us to ensure

that we do not remain on the sidelines; that we participate, and

even take the lead, in ensuring that the abuse of women and children

is completely eradicated during our lifetime. It is our collective

responsibility to send out the message that men are capable of

loving passionately, respectfully and with sensitivity; that women

wish to feel safe in their neighbourhoods and are prepared to build

trust between themselves and their partners.



We must commend our government for stepping up and sustaining the

16 Days of Activism for No Violence against Women and Children as an

annual campaign. The campaign should not end in December every year,
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but we should be vigilant and guard against all forms of abuse

throughout the year.



We can achieve a lot if we can also direct our attention to the

ratification of the Southern African Development Community, SADC,

protocol on gender development. South Africa has to ensure that

efforts by all communities are supported by the ratification of the

protocol without further delay.



In the name of collective action, together we can do more to

eradicate the scourge of violence and abuse against women. Enkosi.

[Thank you.] [Applause.]



Debate concluded.



The DEPUTY SPEAKER: Hon members, that concludes the party responses

to the Minister’s Statement. We move on to the next item. Permission

has been granted to the Minister of Defence and Military Veterans to

make a statement on the final report of the Interim National Defence

Force Service Commission. I am advised that parties have been made

aware of this and will have an opportunity to respond to the

Statement. Before I call on the Minister, hon members, I want to

acknowledge the presence here in the gallery of the Interim National

Defence Force Service Commission, led by Judge Bosielo. You are

welcome as we receive you here. [Applause.]
16 NOVEMBER 2010                          Page: 66 of 264

 FINAL REPORT OF INTERIM NATIONAL DEFENCE FORCE SERVICE COMMISSION



                            (Statement)



Mrs J D KILIAN: Madam Deputy Speaker, can I just ask whether the

Minister perhaps issued us with a copy of the statement?



The DEPUTY SPEAKER: No, hon member, the Minister is going to make

the statement. There is no issuing of the statement.



Mrs J D KILIAN: But according to the Rules, if it was possible, she

could just present it to we members.



The DEPUTY SPEAKER: No, she did not.



The MINISTER OF DEFENCE AND MILITARY VETERANS: Madam Deputy Speaker,

for the benefit of the member of Cope, there is a statement

available and it can be photocopied and distributed as I speak.

Thank you very much.



Madam Deputy Speaker, thank you very much for this opportunity. On

24 August 2010, the Speaker summoned me to his office to discuss the

matter of the Report of the Interim National Defence Force Service

Commission and he insisted both to me and to the Deputy President as

the Leader of Government Business that the finalisation of the

report should be done and it should be presented as speedily as
16 NOVEMBER 2010                          Page: 67 of 264


possible. I gave my word, as did the Deputy President, that we would

comply, and I am now able to confirm that after an initial extension

of the period requested and granted to the commission, this morning

I had the honour and privilege of receiving the Report of the

Interim National Defence Force Service Commission.



It is important at this point to remind ourselves of the purpose or

objective of this exercise, and perhaps the best place to start is

at the beginning. The concept of the commission owes its existence

to the policy intention of my first Budget Vote in 2009, dated

3 July 2009, in this Parliament. I stated at that point, and I

quote:



   ... we are considering making a request for a separate

   dispensation for the Department of Defence that would allow us

   to creatively deal with our own needs and the specificities (and

   uniqueness) of the security requirements (of the Defence Force).



I emphasise this, as it is so often deliberately misinterpreted in

some circles, fuelled by other corners of the House. The intention

to establish the National Defence Force Service Commission was

expressed long before the shameful conduct by a small group of ill-

disciplined members of the Defence Force at the Union Buildings.

It should be obvious, then, that we were alive to the challenge of

addressing the concerns of the S A National Defence Force, SANDF,

after years of the hon Lekota’s being at its helm, a member here who
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stands up and pretends that he is perhaps new to these matters.

These steps also preceded the whimper from some corners of the

opposition benches. They bay and howl at the wind, for no other

reason than to preen their wet wings.



The interim commission was established on 9 September 2009, after

the Cabinet's approval of the creation of the new dispensation for

the Defence Force. The brief of the Interim National Defence Force

Service Commission was clear and well spelt out in the terms of

reference that they were given. These were to:



   1.   advise and make recommendations on a unique service

        dispensation outside the ambit of the Public Service;



   2.   advise on the regulatory framework for the unique service

        dispensation; and



   3.   investigate and provide advice on remuneration and conditions

        of service of members of the SANDF.



The interim commission was advised to deal with these terms of

reference both in the short term, that is, legislation, and in the

long term, which is what we have today in the report. The commission

dealt with these as three separate terms of reference. Each one is a

stand-alone and very separate from the others. I introduced the

commission to the portfolio committee, because the short term
16 NOVEMBER 2010                             Page: 69 of 264


aspect, which was the drafting of legislation, needed some kind of

co-operation with the portfolio committee.



I want to take this opportunity, therefore, to thank the members of

the Interim National Defence Force Service Commission for the

sterling work they have done. They have not only criss-crossed the

length and breadth of this country, interviewing various

stakeholders, but they have also found time to benchmark their work

by visiting the United Kingdom, the United States of America, and

the Russian Federation in order to learn from other countries the

international best practice in a number of issues that have a

bearing on us. I trust that in time we will benefit from the lessons

and insights derived from these visits. They have done us proud in

contributing to the effective and efficient management of the

Defence Force as it fulfils its constitutional responsibility.



The work done by the interim commission is outstanding and I commend

it. Could the hon member allow hon Groenewald to listen because he

is an affected party? Their dedication and commitment are clearly

shown by their hard work in producing the report that they handed

over to me this morning. They gave of their time and energy, despite

the fact that most of them were in full-time employment.



It is now my honour and privilege to acknowledge members of the

interim commission and use the opportunity to thank them most
16 NOVEMBER 2010                          Page: 70 of 264


sincerely for their hard work, commitment, tenacity and single-

mindedness in the midst of the noise and attempts to divert them.



The interim commission consists of people of outstanding calibre who

have brought a great deal of integrity to the work that they have

done. It consists of men and women who have distinguished themselves

in their own right in South African society. These members are Judge

Bosielo, who is a Judge of the Supreme Court of Appeal; Mr Ismail,

who is the Deputy Chairperson; Lieutenant General Moloi, otherwise

known as Comrade A; retired Major General Bantu Holomisa whose

exploits in the Transkei are very well-known to all of us; Ms

Mgabadeli, who is unfortunately not with us here; returning to

General Holomisa, we thought that perhaps he might be the best

placed person to ensure that we are in the safe hands and the

Defence Force does behave; Dr Mokgokong, who was the deputy

chairperson of the commission that allowed a hike in our salaries as

Members of Parliament; Professor Christie, a well-known Western Cape

academic; Mr Ngcakani, the retired Inspector-General of

Intelligence; Bishop Mpumlwana, the Bishop of the African Episcopal

Church, and hon Groenewald, whose attention I’ve been trying to

obtain and who is possibly the longest-serving member of the Defence

Committee in this House. [Applause.] Thank you very much. I would

like, on their behalf, to acknowledge your applause.



In their handing over of the report this morning, it was touching to

hear them say that they did this and for them it was an honour to
16 NOVEMBER 2010                          Page: 71 of 264


serve the country. They stressed that the report is the foundation

of their observations and should be regarded as work still to be

completed by the permanent commission.



Appointing members from such diverse backgrounds allowed us, for the

first time in this dispensation, to have a bird’s-eye view of the

SANDF since 1994. The observations therefore span a period of

15 years. The importance of the commissioners is that they are drawn

from disparate backgrounds; two of them are currently members of

opposition political parties in this House, showing that the

responsibility of the Defence Force cuts across political lines.

There was a deliberate effort to include members of the opposition

political parties on the interim commission to draw as wide a range

of experience as was possible.



It must have been very hard for them to sit here as members of this

House and listen to distortions of certain sections of what is

purported to be their work, a deliberate distortion of their hard

work. The SANDF is a national asset and these members understood

that they could effectively contribute while in the opposition to

ensuring that our sovereignty is in the hands of people who are

looked after.



I would like to say to the Leader of the Opposition, hon Trollip,

that when his member stands here to quote selectively on ongoing

work in order to create an impression of “time bombs”, which exist
16 NOVEMBER 2010                          Page: 72 of 264


only in his imagination, then it begs the question where he was when

all the changes were happening in the Defence Force. He quoted from

a purported report of September last year and brought it here and

pretended that he had just unearthed it, as something that was

written yesterday. Where was he all this time when all these changes

were taking place in the Defence Force?



Together with the interim commission, we worked tirelessly to ensure

that there were changes. The most important fact that they

established, and what must be established in this House, is that it

is possible to be in the opposition to ensure that the governing

party is accountable but to do it responsibly, especially when we

are dealing with a national asset such as the Defence Force.

[Applause.]



There are always two choices in life, hon Trollip: you are either

part of change or you are working against it. Your member has chosen

not to be part of the change but to work against the change. The

immense improvements that have occurred in the Defence Force were

very ably articulated the other day by the hon Minister Pandor. Next

time, instead, of spending his time in newsrooms and feeding the

press, perhaps your hon member will be in the House so that he

understands and is part of the change. What it has done to him right

now, hon Trollip, is that he has defined himself outside the changes

that have occurred in the Defence Force. In fact, if I had been in

his position, I would have made sure that I claimed credit for the
16 NOVEMBER 2010                          Page: 73 of 264


changes that have taken place in the Defence Force. But, very

clearly now, for all of South Africa to know, he was sleeping right

through these changes as they happened.



The report will now undergo the normal process of being submitted to

Cabinet – I’ve made a request to the President to make sure that it

can serve in Cabinet at the earliest possible time. Then it will be

handed over to the Speaker of the National Assembly. As I have

stated before, Parliament will have an opportunity to read the

recommendations emanating from this report. I commend the report.



I would, finally, like to thank those members of the portfolio

committee who co-operated with the commission. I’d like to thank the

members of the SANDF who made the work of the commission possible.

I’d like to thank the Chief of the Defence Force, who made it

possible for us to get this report today. Hon Deputy Speaker, thank

you very much for this opportunity. [Applause.]



Mr D J MAYNIER: Speaker, I was not furnished with a copy of the

Minister’s statement and for that reason it is difficult to provide

a comprehensive response to the announcement in Parliament this

afternoon.



However, let me begin by welcoming the announcement made by the hon

Minister of Defence and Military Veterans that she has now received

a copy of the final report of the Interim National Defence Force
16 NOVEMBER 2010                          Page: 74 of 264


Service Commission, and that the report will be fast-tracked through

Cabinet and tabled in Parliament at the earliest opportunity. This,

I am sure all members of the House will agree, is very welcome news

indeed.



I would like to thank Judge Ronnie Bosielo, who headed up the

commission, as well as all members of the commission, for their hard

work in preparing the final report of the Interim National Defence

Force Service Commission.



We also owe a special debt of gratitude to our colleagues, the hon

Bantu Holomisa, the hon Hlengiwe Mgabadeli and the hon Pieter

Groenewald, who were members of the commission, for their

contribution to the final report of the Interim National Defence

Force Service Commission. I hope that when we look back, the work of

the commission will be a turning point in the history of our Defence

Force.



Speaker, the events surrounding the Interim National Defence Force

Service Commission triggered an almost unprecedented political

battle between the executive and the legislature. Today’s

announcement goes some way, I believe, toward digging the hon

Minister out of the parliamentary quagmire she finds herself bogged

down in.
16 NOVEMBER 2010                          Page: 75 of 264


But the whole question of the interim reports of the Interim

National Defence Force Service Commission remains. One of the many

reasons why the Minister refused to make the interim reports

available was that there was no link between the interim reports and

the Defence Amendment Bill. But the fact is that there is a link

between the interim reports and the Defence Amendment Bill.



The primary objective of the Defence Amendment Bill was to establish

a permanent National Defence Force Service Commission. And what does

one find when one reads the interim reports? One finds that the

interim reports themselves recommend the establishment of a

permanent National Defence Force Service Commission; several pages

of the interim reports are devoted to recommendations covering the

appointment, terms of reference, functions, staffing, and reporting

responsibilities of the National Defence Force Service Commission.

[Interjections.]



The MINISTER OF DEFENCE AND MILITARY VETERANS: Am I allowed to put a

point of order?



The DEPUTY SPEAKER: Do you have a point of order, ma’am?



The MINISTER OF DEFENCE AND MILITARY VETERANS: Yes.



The DEPUTY SPEAKER: Hon member, will you sit down, please? There is

a point of order.
16 NOVEMBER 2010                            Page: 76 of 264




The MINISTER OF DEFENCE AND MILITARY VETERANS: Deputy Speaker, on a

point of order: The hon member is not allowed to mislead Parliament.

The commission was accepted by Cabinet. It has nothing to do with

what you are talking about. That is for the record. Cabinet accepted

it in August.



The CHIEF WHIP OF THE OPPOSITION: Madam Chair, on a point of order:

This is not a point of order.



The DEPUTY SPEAKER: Continue, hon member.



Mr D J MAYNIER: And what does one find when one reads these interim

reports? This is the clincher! One finds that the interim report

itself contains the Defence Amendment Bill.



At some point the hon Minister is going to have to explain how it is

that an interim report, which contains a Draft Defence Amendment

Bill, is not linked to the Defence Amendment Bill? In my view, the

hon Minister owes this House an apology - and I choose my words

carefully – for not providing all the relevant information to this

House. I thank you. [Applause.]



Mna L J TOLO: Mohlomphegi Motlatša Seboledi sa Ngwako, go bolela

nnete re a thaba lehono go kwa dipoelo ka bokopana go tšwa go

Sehlophatšhomo se se dirilego mmereko. Seo ke nyakago go se laetša
16 NOVEMBER 2010                             Page: 77 of 264


ke se, bengbaka. Go na le mangwalo a mararo ao ke a swerego.

Lengwalo le lengwe ke la Tona, le lengwe ke la Seboledi gomme le

lengwe ke la Bapela. Lengwalo la Tona ga le kwane le la Seboledi. Mo

lengwalong la gagwe, Tona o laeditše gore Molaokakanywa wa Phetošo

le Lekgotlatšhomo ga di amane. O laeditše gape gore o be a re

kgopetše gore re tle re thušane, fela a lemoga gore ga re na

bokgoni. Bjale, go bolela nnete Tona o tšea ke maikutlo. Rena re le

maloko a ANC a photefolio komiti re be re kwana ka dikgopolo. Yo a

bego a re swarišitše bothata kudu ke Tona.



Go ya ka polelo yeo e bolelwago ke mohlomphegi wa DA, Seboledi se

ntšhitše lengwalo la go re fetola. Seboledi se laeditše gore ka di31

tša Agostose 2010, Tona o tiišitše gore pego le Molaokakanywa wa

Phetošo ga di amane. Bjale, go laetša gore di a amana, ke rena ba re

bolela ka tšona.



Rena re le ba Cope re re Tona o swanetše go lemoga gore Kgoro ya tša

Tšhireletšo le Bagale ba Sešole ga se ya gagwe a le noši, eupša ke

ya rena kamoka ga rena. Re na le maikarabelo go yona kamoka ga rena.



Tona o swanetše go ithuta gore a se tšee ke maikutlo. Ge ke be ke na

le sebaka, ke be ke tla bala lengwalo le, bengbaka; o a lwa. Gape re

duma gore Tona a lemoge gabotse gore ... [Tšhwahlelo.] [Nako e

fedile.] (Translation of Sepedi speech follows.)
16 NOVEMBER 2010                          Page: 78 of 264


[Mr L J TOLO: Hon Deputy Speaker, we are glad to hear a brief report

from the members of the interim commission. I have three letters

with me and they are from the Minister of Defence and Military

Veterans, the Speaker and the hon Bapela. The contents of the letter

from the Minister do not correspond with the contents of the letter

from the Speaker. The Minister indicated in her letter that there is

no link between the reports of the interim commission and the

Defence Amendment Bill. She further indicated that she wanted us to

work together, but we could not. We shared the same ideas as ANC

members in the portfolio committee. The Minister was the only one

who disagreed.



According to the hon member from the DA, the Speaker indicated in

his letter that on 31 August 2010, the Minister made it clear that

there is no link between the reports of the interim commission and

the Defence Amendment Bill. But there is a link between them, hence

we are now deliberating on them.



The members of Cope want to make the Minister aware that the

Department of Defence and Military Veterans does not belong to her

alone, but to all of us. We are all responsible for it.



The Minister has to learn to be co-operative. I would read this

letter if I had enough time; she denies the link. We want the

Minister to be aware that ... [Interjections.] [Time expired.]]
16 NOVEMBER 2010                            Page: 79 of 264


Mnu V B NDLOVU: Sekela Somlomo neNdlu ehloniphekile, okokuqala,

kufuneka ngithokoze ukuthi umhlonishwa uNgqongqoshe, ukwazile ukuthi

azoma lapha azokhuluma ngombiko esingakawucoshi. Kodwa ngoba

useshilo ukuthi sizowucosha umbiko ngoba usawudlulisele kuMongameli.

Ngiyethemba ukuthi sizowucosha masishane.



Okwesibili, lo mbiko sekukhulunywe kakhulu ngawo, kube kukhuluma

abantu abangakaze bawubone. Mina angikaze ngawubona-ke, angifuni

ukukhuluma ngento engingakaze ngiyibone.[Ihlombe.] Manje mhlawumbe

Somlomo bekungakuhle ukuthi ngelinye ilanga sike sixoxe ngalo mbiko

uma sengiwubonile nami, ngoba lokukhuluma lokhu sekwenze ukuthi kube

khona umugqa phakathi kukaKhongolose nabe-DA [Uhleko.] bese kuba

ngathithi abaphakathi nendawo bakhuluma ngoba bengazi ukuthi bafuna

ukuthini.



Kanti okuseqinisweni kukhona la kuthiwa ngokomthetho ungakhulumi

ngento ongazange uyibone. Manje bengicela Somlomo, ukuthi lo mbiko

njengoba uzothulwa la namhlanje, kusewumlomo nje kaNgqongqoshe.

Siyawufuna umbiko uzothulwa ngokusemthethweni ukuze sikwazi ukuxoxa

ngawo sesiwufundile. Kulapho-ke la sizokhuluma khona.

Angithokoze.[Ihlombe.] (Translation of isiZulu speech follows.)



[Mr V B NLDOVU: Deputy Speaker and this august House, firstly, I am

grateful that the hon Minister managed to come here and speak about

the report we have not received yet. But because she said we will be
16 NOVEMBER 2010                          Page: 80 of 264


getting the report, as she had forwarded it to the President, I

believe we will receive it soon.



Secondly, a lot has been said about this report by the people who

have not seen it. I have not seen it; I do not want to talk about

something that I have not seen. [Applause.] Speaker, it might be

better for us to debate this report some other time once we have

received it, because these talks have caused a division between the

ANC and the DA ... [Laughter.] ... which makes those who are in

between look like they do not know what they want to say.



In actual fact, by law one should not talk about something one did

not see. My request, Speaker, is that since this report is going to

be verbally delivered here today by the Minister, we want the report

to be formally delivered so that we can debate it after we have read

it. Then we can talk. Thank you. [Applause.]]



Mr B H HOLOMISA: Deputy Speaker, hon Minister and hon members, it

was a privilege to have been invited to render my free services to

the interim commission. A special word of thanks goes to my fellow

commissioners, and our chairperson, Judge Bosielo, in particular,

for his leadership in the past year. May this report, when it is

tabled here, serve as the basis upon which to build a turnaround

strategy for the SA National Defence Force, SANDF, to restore its

image and dignity. This will allow the SANDF to recapture lost

ground.
16 NOVEMBER 2010                             Page: 81 of 264




Finally, once this report is adopted, one envisions a process of the

Department of Defence, DoD, holding a bosberaad to discuss the

report. Out of that we hope that there will be a clear action plan

determining who will do what and according to what deadlines. I

thank you. [Applause.]



Mnr P J GROENEWALD: Agb Adjunkspeaker, die agb Tolo van Cope is

korrek as hy sê dat die Suid-Afrikaanse Nasionale Weermag aan ons

almal behoort. Dit is ook uit daardie perspektief dat my party

besluit het om my beskikbaar te stel om op hierdie kommissie te

dien.



Ek wil die agb Minister bedank. Ek dink ons kon ’n bydrae maak. Ek

wil die Huis verseker dat hierdie verslag ’n objektiewe verslag is,

sonder vooroordeel, en dit is ook ’n kritiese verslag wat in belang

is van al ons lede in die Suid-Afrikaanse Nasionale Weermag.



Ek wil ook van hierdie geleentheid gebruik maak om die voorsitter,

regter Bosielo, te bedank en ook al die ander kommissielede. Dit was

’n voorreg om saam met hulle op so ’n kommissie te dien en om in

belang van ons mense op te tree. Ek wil vir die agb Minister en die

Kabinet sê, as u hierdie verslag aanvaar soos hy is en die

aanbevelings in die praktyk deurvoer, sal ons ’n professionele en ’n

baie beter Suid-Afrikaanse Nasionale Weermag hê. Ek dank u.

(Translation of Afrikaans speech follows.)
16 NOVEMBER 2010                          Page: 82 of 264




[Mr P J GROENEWALD: Hon Deputy Speaker, the hon Tolo of Cope is

correct when he says that the South African National Defence Force

belongs to all of us. It is also from this perspective that my party

decided to release me to serve on this commission.



I would like to thank the hon Minister. I am of the opinion that we

were able to make a contribution. I would like to assure the House

that this report is an objective report, without prejudice, and that

it is also a critical report that is to the benefit of all our

members in the South African National Defence Force.



I would also like to use this opportunity to thank the chairperson,

Judge Bosielo, and all the other members of the commission as well.

It was a privilege to serve on such a commission with them and to be

able to act in the interests of our people. I would like to say to

the hon Minister and the Cabinet, should you accept this report as

it stands and carry through the recommendations in practice we would

have a professional and a much improved South African National

Defence Force. Thank you.]



Mr K J DIKOBO: Deputy Speaker, in Azapo’s book soldiers do not go on

strike or take part in industrial action. If they do, we call it

mutiny. The country was shocked to see what some members of the

Defence Force did at the Union Buildings. Many people, including the

Minister, condemned them and called them names.
16 NOVEMBER 2010                          Page: 83 of 264




As Azapo we know that some of those soldiers previously served in

the armed forces of the different components of the liberation

movement. They did so without pay and at great risk to personal

security and life. They sacrificed their youth and life because of

their love for their people and country. They are not greedy or ill-

disciplined. They are desperate. They cannot make ends meet. They

must be paid living wages and their working conditions must be

improved. We owe it to them.



It is our hope and prayer that this report will help us to address

the needs of our armed forces so that we can restore their dignity.

Thank you very much. [Applause.]



Mr S N SWART: Madam Deputy Speaker and hon Minister, the ACDP

welcomes the report of the interim commission and we look forward to

further engaging with the specific findings and recommendations of

this report.



It is, however, significant, as the hon Minister has pointed out,

that this commission was intended before the ill-disciplined and

unruly action of certain members when they demonstrated outside the

Union Buildings. Such persons, we must emphasise, can claim no

credit for today’s report. We need to make that very clear.

The responsibility of the national defence force must cut across

party-political lines. This is clearly illustrated by the fact that
16 NOVEMBER 2010                          Page: 84 of 264


members of the opposition served on the commission and we as an

opposition party will also contribute as we consider the

recommendations of this report. We trust that the recommendations

will address the frustrations of serving members concerning

benefits, and living and working conditions, and will serve to

prevent the further loss of skilled personnel so that we can have a

professional SA National Defence Force. I thank you.



Mr M S BOOI: Deputy Speaker, I would like to thank the hon Minister

for being able to come back to Parliament and make a presentation on

this thorny issue. I must say in earnest that we are floundering in

the information that is being thrown around, which is actually

thumb-suck. Sometimes this hurts and demoralises the soldiers, and

we don’t understand where the report has come from.



In the portfolio committee we were very emphatic that the report had

to come through the Ministry, and the Ministry would then present it

to Cabinet, and it would come to Parliament. We have never been able

to conceptualise how that type of report comes as it does. When it

came to our attention that there was a report that was being thrown

around in the streets that was when it came to our portfolio

committee. That was when unions were saying that there was a report.



Nobody knows the essence and contents of the report. The Speaker

directed us, saying that there was no link between the Bill that we

had to prepare and what was in the report. He was the only person in
16 NOVEMBER 2010                          Page: 85 of 264


Parliament who could give us the confidence in the work that we were

doing. We thank the Speaker sincerely for being able to give us

direction.



The manner in which you played opposition politics and narrated your

stories has nothing to do with the portfolio committee. At no stage

did we commit ourselves to what the opposition member always said

and explained in the papers, saying that there was a report. In

terms of our regulations, performance and how we did our work in the

portfolio committee, at no stage did we ever find that link.



You were correct when you said it was a misleading act to come to

Parliament and tell us that there was a report, when nothing was

ever presented officially to the institution of Parliament. It would

be quite a disaster for us as a portfolio committee to say that that

report was ever placed. It has always been about gossip and rumours.

I can honestly say that none of the rumours and the gossip were

correct.



As I stand here on behalf of the portfolio committee to thank the

Interim National Defence Force Service Commission for the work that

they have done, they and nobody else have ever been able to place

the report. Today we have stood again for matters of principle and

the following of procedure, that they will come to the institution

and present it. They have to come and tell us what is happening.
16 NOVEMBER 2010                          Page: 86 of 264


We have not played at the level of gossip and rumours that have been

spread around in regard to the issue. As the portfolio committee, at

this particular moment, without listening, narrating and playing to

enthusiasms about what the opposition leader said, we feel that the

matter stands firm that there is no report. I vouch for what I am

saying, and I stand by the oaths that I have taken in Parliament,

that there is no report. You will be misleading Parliament by coming

to claim that there is a report that has been placed somewhere. It

has been rumours.



We told the South African National Defence Union, Sandu, to present

the report that they had to us. However, the report that they had

was gained by theft. We are saying to the union that the report they

had was gained by theft. The portfolio committee agreed that the

union had stolen the report from somewhere, but it did not know

where. As a matter of fact, that is what the records of our

portfolio committee say: The union went and stole that report. Who

they got it from and what the contents of that report are has never

been deliberated before the portfolio committee. Again, it would be

misleading to say that that report has ever been presented. Under my

leadership, according to my knowledge, no report has ever been

presented to the portfolio committee.



It is really misleading to Parliament when an hon member claims

things - and tries to lead by all his activities and dancing - that
16 NOVEMBER 2010                          Page: 87 of 264


there were links. We have finished the Bill and nobody has ever been

able to prove the link and show us what was happening.



Let me thank the interim commission for the good work that they have

done, and the commitment that they have shown in the way they have

conducted themselves. The members have been able to stick to the

mandate that they have been provided with. The level of transparency

with which you have conducted this particular development, Minister,

has been very valuable. You were the first one to come to Parliament

and introduce the mixture of the opposition, our party and different

people who would be able to take this responsibility. You have done

very well and have been able to keep us informed.



If those members had gone against the discipline that you provided

them with when dealing with issues of confidentiality, I must say

that hon Holomisa, hon Groenewald and even hon Ntsiki were not able

to break that form of discipline. We must really thank them for the

way they conducted themselves. Even in times when we were very

pressured and we feel that there was the responsibility of trying to

confide and tell us what was going on in the report itself, they

maintained that discipline. Hon members, we really want to thank

you. You have done a very good job. From your own experience you

have heard us telling you in the committee that you have had a

variety of experiences which have been able to make their way into

the report itself. Therefore, we would like to thank you very much.
16 NOVEMBER 2010                          Page: 88 of 264


You know, hon Holomisa, if I can repeat what I said to you at some

stage when I met you, your experience is very valuable. Nobody can

tell us that you have never gone through building up a defence

force. We have also told hon Groenewald that his experience has

added a lot of value to the report that has come out.



I must say, Minister, we have heard members speaking today and we

have had a reflection of the navy from them. People from the navy

know it better and are able to tell you the truth about it, show it

as in a mirror. One of our members has been trained there. They

would have a better understanding of how a navy functions. We have

heard a very good presentation from the landward section today.

There is the issue of the combat-readiness which never suffices.

Those members who are there and are committed to our country have

today been able to stand firm and explain to hon members about the

conduct and the challenges that the SA National Defence Force is

facing in regard to its landward, air force and maritime areas.



Tomorrow we are taking an observation from the Air Force and one

from Health. Both sectors and components have an influence on the

combat-readiness of the SANDF. They have been able to present to us,

unambiguously, the progress that has been made within the SANDF. I

thought that hon members would appreciate that type of development

because it speaks to our patriotism and how we should conduct

ourselves, based on the information regarding the institution which

has been provided.
16 NOVEMBER 2010                          Page: 89 of 264




Again, we would like to thank General Door for the way he conducted

himself and also the Admiral for being able to give the navy a

proper report on how we can look at the institution again. There is

a lot of progress that has been made. We are quite confident that

the improvements that we have put in place and the commission itself

will be able to improve the conduct of the SANDF.



The Interim National Defence Force Service Commission’s very

experienced people have not come just to play games. They have made

it very clear that they are good South Africans and they have taken

on other responsibilities outside of their own responsibilities.

When the Minister called upon them to come and help with giving

South Africans a better view of the type of defence that should be

built and the type of capacity that there should be, we must say

that they were able to comply with that. They have been able to

perform like honourable and professional people, as has been

expected of them. Today, it has been able to put the matter that we

keep on speculating on to rest.



We have been very, very clear in the portfolio committee, even in

the recent past, and we are very emphatic about this, that what one

hon member says to the media is not on behalf of the portfolio

committee. Most of the time, that person speaks on behalf of

himself, and not the institution itself, the portfolio committee.

The portfolio committee does not have any other spokesperson. If
16 NOVEMBER 2010                          Page: 90 of 264


there are issues that have to be raised and brought to the public, I

do it in a very transparent way. I allow the media to participate in

the institution and I have never understood at what stage hon

members feel that it has to happen in a totally different way.



Nobody has an input in this matter. In the ANC appointments are

made. There is no stage when I will come to you and solicit you to

tell me what to do, or how our people should be appointed in the

organisation. In that regard I am fairly well informed. I am telling

you that there has been a misleading of Parliament and the broad

public regarding how we handle reports within parliamentary

precincts. That failure has been proven again today, even at the

stage when the Minister has come and informed the institution about

how she has handled the report.



Those things were all said in public, and they have been said quite

a lot of times to the different members, in order for them to be

able to understand. I must say that that was a failure of our own

system. It is when individuals take it upon themselves to think that

they are above the system itself. I thank you. [Applause.]



Debate concluded.

   REGULATION OF INTERCEPTION OF COMMUNICATIONS AND PROVISION OF

          COMMUNICATION-RELATED INFORMATION AMENDMENT BILL



                      (Second Reading debate)
16 NOVEMBER 2010                          Page: 91 of 264




There was no debate.



Bill read a second time.



       CONSIDERATION OF REQUEST FOR APPROVAL OF ACCESSION TO

       AFRICAN CHARTER ON DEMOCRACY, ELECTIONS AND GOVERNANCE



Mr H T MAGAMA: Deputy Speaker, the Portfolio Committee on

International Relations recommends that the House approve the

ratification of the African Charter on Democracy, Elections and

Governance.



This is a clear and deliberate decision by the government of the

Republic of South Africa to be amongst the countries taking the lead

on the continent, demonstrating our commitment to good governance,

popular participation, respect for the rule of law and the promotion

and protection of human rights.



The charter seeks to entrench and consolidate on the continent a

political culture of change of power through the holding of regular

elections which are free, fair and transparent, and which are

conducted by a competent, independent, impartial, national electoral

body. It thus provides for the enhancement of the role of election

observation and monitoring in contributing towards the credibility

of elections.
16 NOVEMBER 2010                          Page: 92 of 264




South Africa has proudly put in place all the necessary institutions

for the effective implementation of this charter. Its ratification,

therefore, will confirm our country’s resolve to lead by example and

encourage fellow African countries to do the same and embrace this

instrument. This instrument has the potential to address the

political and socioeconomic situation in Africa by deepening peace

and security which, by themselves, constitute the necessary

preconditions for development, progress and prosperity in Africa.

Thank you. [Applause.]



There was no debate.



Declaration of vote:



Ms S V KALYAN (DA): Deputy Speaker, the African Charter on

Democracy, Elections and Governance was adopted at the 8th Ordinary

Session of the AU Assembly of member states of the African Union in

January 2007.



The charter was developed as part of the AU’s emphasis on promoting

democracy and good governance in member states. As such, it has the

potential to serve as a guide and reference point for sustained and

ongoing political reform on the African continent. It also places

emphasis on women and youth.
16 NOVEMBER 2010                          Page: 93 of 264


However, it must be ratified by 15 states before it takes effect. In

July 2010 only five states had ratified it. South Africa was not one

of them, which is most unfortunate.



The Pan-African Parliament, PAP, was given the responsibility

through article 45 of the charter to promote it. It was thus decided

to launch the “11 Before 2011” campaign in order to get as many

countries as possible to ratify it ahead of the AU’s Heads of State

Summit in 2011.



As the Pan-African Parliament delegate to the Central Africa

regional meeting in early September, I undertook to write to the

Minister and was delighted when she referred the charter to the

portfolio committee. South Africa will be the second Southern

African Development Community country to ratify the charter after

Lesotho. We should have been the first. As the host country of the

Pan-African Parliament, we need to lead by example and promote

democracy. Nevertheless, we support the charter fully and the next

step will be to encourage compliance by the member states.



Accession to the African Charter on Democracy, Elections and

Governance approved.

   CONSIDERATION OF BUDGETARY REVIEW AND RECOMMENDATION REPORT OF

   PORTFOLIO COMMITTEE ON MINING ON PERFORMANCE OF DEPARTMENT OF

            MINERAL RESOURCES FOR 2009-10 FINANCIAL YEAR
16 NOVEMBER 2010                          Page: 94 of 264

   CONSIDERATION OF BUDGETARY REVIEW AND RECOMMENDATION REPORT OF

   PORTFOLIO COMMITTEE ON WOMEN, CHILDREN, YOUTH AND PEOPLE WITH

  DISABILITIES ON PERFORMANCE OF DEPARTMENT OF WOMEN, CHILDREN AND

        PEOPLE WITH DISABILITIES FOR 2009-10 FINANCIAL YEAR



   CONSIDERATION OF BUDGETARY REVIEW AND RECOMMENDATION REPORT OF

    PORTFOLIO COMMITTEE ON PUBLIC ENTERPRISES ON PERFORMANCE OF

    DEPARTMENT OF PUBLIC ENTERPRISES FOR 2009-10 FINANCIAL YEAR



   CONSIDERATION OF BUDGETARY REVIEW AND RECOMMENDATION REPORT OF

   PORTFOLIO COMMITTEE ON AGRICULTURE, FORESTRY AND FISHERIES ON

  PERFORMANCE OF DEPARTMENT OF AGRICULTURE, FORESTRY AND FISHERIES

                     FOR 2009-10 FINANCIAL YEAR



   CONSIDERATION OF BUDGETARY REVIEW AND RECOMMENDATION REPORT OF

 STANDING COMMITTEE ON FINANCE ON PERFORMANCE OF NATIONAL TREASURY

                     FOR 2009-10 FINANCIAL YEAR



   CONSIDERATION OF BUDGETARY REVIEW AND RECOMMENDATION REPORT OF

   PORTFOLIO COMMITTEE ON CO-OPERATIVE GOVERNANCE AND TRADITIONAL

AFFAIRS ON PERFORMANCE OF THE DEPARTMENT OF CO-OPERATIVE GOVERNANCE

         AND TRADITIONAL AFFAIRS FOR 2009-10 FINANCIAL YEAR

   CONSIDERATION OF BUDGETARY REVIEW AND RECOMMENDATION REPORT OF

   PORTFOLIO COMMITTEE ON TOURISM ON PERFORMANCE OF DEPARTMENT OF

    ENVIRONMENTAL AFFAIRS AND TOURISM FOR 2009-10 FINANCIAL YEAR
16 NOVEMBER 2010                          Page: 95 of 264

   CONSIDERATION OF BUDGETARY REVIEW AND RECOMMENDATION REPORT OF

      STANDING COMMITTEE ON FINANCE ON STATISTICS SOUTH AFRICA



   CONSIDERATION OF BUDGETARY REVIEW AND RECOMMENDATION REPORT OF

   PORTFOLIO COMMITTEE ON SPORT AND RECREATION ON PERFORMANCE OF

   DEPARTMENT OF SPORT AND RECREATION FOR 2009-10 FINANCIAL YEAR



   CONSIDERATION OF BUDGETARY REVIEW AND RECOMMENDATION REPORT OF

PORTFOLIO COMMITTEE ON HOME AFFAIRS ON PERFORMANCE OF DEPARTMENT OF

              HOME AFFAIRS FOR 2009-10 FINANCIAL YEAR



    CONSIDERATION OF BUDGETARY REVIEW AND RECOMMENDATION REPORT

         OF PORTFOLIO COMMITTEE ON POLICE ON PERFORMANCE OF

          DEPARTMENT OF POLICE FOR 2009-10 FINANCIAL YEAR



    CONSIDERATION OF BUDGETARY REVIEW AND RECOMMENDATION REPORT

         OF PORTFOLIO COMMITTEE ON LABOUR ON PERFORMANCE OF

          DEPARTMENT OF LABOUR FOR 2009-10 FINANCIAL YEAR



There was no debate.



The CHIEF WHIP OF THE MAJORITY PARTY: Chairperson I move:

  That the Reports be adopted.



Motion agreed to.
16 NOVEMBER 2010                            Page: 96 of 264


Reports accordingly adopted.



   CONSIDERATION OF FOURTH REPORT OF STANDING COMMITTEE ON PUBLIC

     ACCOUNTS ON REPORT OF AUDITOR-GENERAL ON 2008-09 FINANCIAL

                   STATEMENTS OF DEPARTMENT OF LABOUR



   CONSIDERATION OF FIFTH REPORT OF STANDING COMMITTEE ON PUBLIC

     ACCOUNTS ON REPORT OF AUDITOR-GENERAL ON 2008-09 FINANCIAL

                    STATEMENTS OF COMPENSATION FUND



   CONSIDERATION OF SIXTH REPORT OF STANDING COMMITTEE ON PUBLIC

     ACCOUNTS ON REPORT OF AUDITOR-GENERAL ON 2008-09 FINANCIAL

            STATEMENTS OF COUNCIL FOR BUILT ENVIRONMENT



  CONSIDERATION OF SEVENTH REPORT OF STANDING COMMITTEE ON PUBLIC

     ACCOUNTS ON REPORT OF AUDITOR-GENERAL ON 2008-09 FINANCIAL

                   STATEMENTS OF BOXING SOUTH AFRICA



   CONSIDERATION OF EIGHTH REPORT OF STANDING COMMITTEE ON PUBLIC

     ACCOUNTS ON REPORT OF AUDITOR-GENERAL ON 2008-09 FINANCIAL

         STATEMENTS OF DEPARTMENT OF CORRECTIONAL SERVICES



   CONSIDERATION OF NINTH REPORT OF STANDING COMMITTEE ON PUBLIC

     ACCOUNTS ON REPORT OF AUDITOR-GENERAL ON 2008-09 FINANCIAL

                      STATEMENTS OF THE PRESIDENCY
16 NOVEMBER 2010                            Page: 97 of 264

   CONSIDERATION OF TENTH REPORT OF STANDING COMMITTEE ON PUBLIC

     ACCOUNTS ON REPORT OF AUDITOR-GENERAL ON 2008-09 FINANCIAL

STATEMENTS OF DEPARTMENT OF PUBLIC WORKS AND ITS PROPERTY MANAGEMENT

                           TRADING ENTITY



  CONSIDERATION OF ELEVENTH REPORT OF STANDING COMMITTEE ON PUBLIC

     ACCOUNTS ON REPORT OF AUDITOR-GENERAL ON 2008-09 FINANCIAL

              STATEMENTS OF GOVERNMENT PRINTING WORKS



  CONSIDERATION OF TWELFTH REPORT OF STANDING COMMITTEE ON PUBLIC

     ACCOUNTS ON REPORT OF AUDITOR-GENERAL ON 2008-09 FINANCIAL

STATEMENTS OF COMPANIES INTELLECTUAL PROPERTY OFFICE IN SOUTH AFRICA



There was no debate.



The CHIEF WHIP OF THE MAJORITY PARTY: Chairperson I move:



   That the Reports be adopted.



Motion agreed to.



Reports accordingly adopted.



              WELCOMING OF THE CONSUL GENERAL OF INDIA
16 NOVEMBER 2010                             Page: 98 of 264


The DEPUTY SPEAKER: Order! I wish to acknowledge the presence in the

gallery of Mr Kumar, the Consul General of India to the Republic of

South Africa in Cape Town, as well as Mrs Kumar - you are welcome.

[Applause.]



              CELEBRATION OF 150TH ANNIVERSARY OF ARRIVAL OF

        INDENTURED LABOURERS OF INDIAN ORIGIN IN SOUTH AFRICA



                         (Subject for Discussion)



The CHIEF WHIP OF THE MAJORITY PARTY: Hon Deputy Speaker, hon

members, on this occasion of the 150th anniversary of the arrival of

the Indian community in South Africa, it is fitting that we express

ourselves on unity in diversity.



When the Indians arrived in the colony of Natal to work on the sugar

cane farms they were, in fact, no different from the African people,

who were hunted like animals, captured and forcibly transported to

the Americas to work on the farms, in households and in the

construction industries that produced the great civilisations of

Latin and North America.



These Indians, like African slaves and workers in America, came from

diverse ethnic and cultural backgrounds, but were united by their

spiritual traditions which nourished their self-respect, self-worth

and self-esteem, culture of self-help and self-reliance, and a sense
16 NOVEMBER 2010                             Page: 99 of 264


of development and progress. These values sustained their human

dignity in adversity and aroused the disposition to associate with

one another for mutual benefit.



While working as slaves on sugar cane farms and in other industries

the Indians, like Africans in the diaspora, rediscovered their

spiritual traditions and harnessed them for spiritual growth and

development. Thus they conducted their lives according to sound

moral and ethical principles, despite the adverse conditions in

which they lived and worked. The arrival of Mahatma Gandhi provided

them with a spiritual and political leader who enriched all South

Africans. We should note, in particular, the principle of nonviolent

struggle that Gandhi shared with Martin Luther King Junior.



The social and economic advancement of Indians in South Africa, like

that of Africans in the diaspora, proves correct the wise words of

our icon, Nelson Rolihlahla Mandela, who said that social

transformation cannot be achieved without spiritual transformation.

The Indian community built its own temples, schools, mosques and

cultural schools, through which they preserved and practised their

diverse cultures, religions and languages.



Similarly, Africans in the diaspora rediscovered their heliocentric,

that is, sun-centred, spiritual traditions which were taught by the

African sage Khem or Thoth Hermes. They built lodges for the

preservation and propagation of their solar culture and religion.
16 NOVEMBER 2010                          Page: 100 of 264


They practised this solar culture and religion in the Rosicrucian

and Masonic Lodges, which could be traced back to the land of Khem,

including ancient Ethiopia and Egypt.



The devotees of Karaism, which is a sun-centred religion or

Hermeticism, collaborated with Ethiopian Christians who had seceded

from colonial churches and established their own churches and

schools. These institutions, like those of the Hindus and Muslims in

South Africa, laid the foundations for nation-building and social

cohesion in these communities.



The nationalist spirit kindled by these spiritual traditions and the

working-class consciousness led to the formation of the Natal Indian

Congress in 1894, and the Native Congresses of the four South

African colonies at the beginning of the 20th century. It could

therefore be said that spiritual traditions and worker consciousness

catalysed the formation of nationalist organisations which became

motive forces for the liberation of South Africa. The formation of

the South African Native National Congress, SANNC, in 1912, renamed

the African National Congress in 1923 and the South African Indian

Congress, SAIC, was the product of spiritual and worker

consciousness. The pact of The Three Doctors, Xuma, Dadoo and

Naicker in the 1940s was the product of these people’s movements.



It could be said, therefore, that moral and ethical values have

always guided the founders of our nation, such as John Langalibalele
16 NOVEMBER 2010                         Page: 101 of 264


Dube, Mahatma Gandhi and Dr Abdullah Abdurahman, who founded the

African People’s Organisation in 1902. Abdurahman was a coloured

nationalist who used the words African and coloured interchangeably

to include both black and coloured Africans, thereby transcending

present-day discriminatory differentiation between Africans and

coloureds, which borders on a new form of racism.



The proliferation of incidents of moral degeneration, such as

alcoholism, drug addiction, the tragic killing of others, including

foreign guests, and the abuse of women and children, such as

drugging and raping of girl children at schools, shows that cohesive

nations cannot be built without value systems. Provision of social

services, including water, electricity, and social grants, without a

value system underpinning them cannot produce self-respecting,

cohesive, caring and sustainable communities. Human development has

both spiritual and material aspects.



Politicians alone cannot achieve both; they need partnerships with

faith communities, including Hindus, Muslims, Karaites and devotees

of African religion who were marginalised under apartheid

colonialism.



In our work as public representatives, community workers and

leaders, we must learn from the Indian community, the African

diaspora and the founders of our nation, that social transformation

cannot be achieved without spiritual transformation. Regardless of
16 NOVEMBER 2010                         Page: 102 of 264


our cultural, religious and linguistic diversity there is a common

thread that makes all of us one in diversity.



“Motho ke motho ka batho” is the maxim that says “I am through

others” or “I am because we are”. This “botho” or “ubuntu”

philosophy was first echoed in 1892 by John Langalibalele Dube, a

founding president of the ANC, in his public lecture titled, “Upon

my Native Land”. Dube foretold the birth of a new Africa that would

be a spiritual, humane and caring society.



These values were embraced by Dr Pixley ka Isaka Seme in his 1905

oration titled, “The Regeneration of Africa”. Seme highlighted the

importance of cultural heritage in nation-building, when he called

for the creation of a unique civilisation for Africa and Africans.

In other words, nation-building and heritage development could not

be separated.



In his 1921 public lecture titled, “We are not Political Children”,

Rev Z R Mahabane, third president of the ANC, observed that Africans

had been degraded and dehumanised, and he made the recovery of

African humanity a prerequisite for the recovery of the humanity of

all South Africans, both black and white. Mahabane planted the seeds

of nonracialism which found expression in the Bill of Rights adopted

by the ANC in 1923. The opening paragraphs of this Bill of Rights

asserted the humanity of African people and demanded their right to

participate in the economic life of the country.
16 NOVEMBER 2010                         Page: 103 of 264




It is not surprising that in its 2007 Strategy and Tactics document

the ANC observed that the dark night of apartheid had been receding

and called for a nonracial, nonsexist, united, democratic and

prosperous South Africa, in which the value of every citizen is

measured by our common humanity – ubuntu or botho.



The adoption of a resolution for the establishment of a committee on

nation-building and heritage by this House is a recognition and

acknowledgement by the hon members of the House that Parliament has

a major role to play in nation-building and heritage development

necessary for social cohesion.



The Muslim Ramadan, the Hindu Diwali festival and the African New

Year and Rain-Making ceremonies take place around September and

October. All these festivals, though not officially recognised are

part of the living heritage of these communities and their

celebrations serve to cultivate moral and ethical values within

them.



The passage of a host of laws which were racially discriminatory

evidenced the danger of separating law and morality. These values of

a just and caring society should underpin our social and political

order to prevent moral degeneration which manifests itself in, inter

alia, corruption and related vices.
16 NOVEMBER 2010                         Page: 104 of 264


The establishment of the Parliamentary Interfaith Council by this

Parliament recognises and acknowledges the role that faith

communities play in the cultivation of moral and ethical values in

our society. This council will provide an interface between

Parliament and faith communities to ensure that there is no

watertight separation between law and morality.



The strict observance of moral and ethical values within the Indian

communities offers great lessons to African communities, especially

in townships and informal settlements, who lost their cultural

heritage under apartheid colonialism. These values are particularly

important, in fact, indispensable, for nation-building and social

cohesion. The interaction of all our communities, both black and

white, is particularly important, as it affords South Africans

opportunities to learn from one another, for mutual understanding,

tolerance and respect.



The national conference hosted by the National Heritage Council and

the South African Departments of Arts and Culture, Social

Development, and Education on 31 August 2010 called for the

recognition of Ubuntu Day and resolved to launch a campaign for the

restoration of ubuntu values and principles. Given the deepening

moral degeneration in our society, such a campaign is long overdue.

It is hoped that all faith communities and civil society in general

will partner with government, Parliament and legislatures to run the
16 NOVEMBER 2010                            Page: 105 of 264


campaign for moral regeneration and in particular the restoration of

ubuntu values and principles.



The African Renaissance and Nepad, falling within the tenth

strategic objective of Parliament couched as African renewal,

advancement and development, should be an umbrella including a moral

regeneration programme driven by government, civil society and, in

particular, the interfaith movement.



In this regard, the classical Indian and African cultural heritage,

which was suppressed under apartheid, could make a great

contribution to nation-building and social cohesion. It is hoped

that the new committee on nation-building and heritage development

will become a parliamentary mechanism for the realisation of an

activist parliament and the African Renaissance renewal, advancement

and development of the African continent.



As I conclude, hon Deputy Speaker, let me say that what we can learn

from the Muslim and Hindu communities is that values cannot be

cultivated by a plethora of charters without the necessary cultural

institutions to teach these values and integrate them into school

programmes and out-of-school programmes. African communities have a

lot to learn from the Muslim madrasah schools and Hindu temple

schools. The establishment of African cultural heritage centres

along similar lines could contribute to moral regeneration, mutual
16 NOVEMBER 2010                          Page: 106 of 264


understanding and tolerance, social inclusivity and development of

South African and African identity.



Let us take this opportunity, as the ANC in this House, to send warm

fraternal greetings to the Indian community on the occasion of the

celebration of the 150th anniversary of their arrival in South

Africa. My wish is that they will continue to make valuable

contributions to building this nation. Thank you. [Applause.]



Mrs S V KALYAN: Deputy Speaker, it is indeed a privilege to

participate in the debate to mark the 150th anniversary of the

arrival of indentured Indian labourers in South Africa. It is an

opportunity to honour the memory of unsung heroes and heroines who

through blood, sweat and tears contributed to this country we know

as home.



The history of how Indian indenture came about is worth repeating.

When slavery was abolished, the British needed a new source of

labour. The British, being rather creative with words, came up with

the term indenture, which in essence meant slavery. Historian and

physicist P S Joshi said:



   The indentured labour system was introduced by the British as a

   substitute for “forced labour and slavery”.

   The indentured Coolies were half slaves, bound over body and

   soul by 101 inhuman regulations.
16 NOVEMBER 2010                         Page: 107 of 264




The Immigration Department in Natal published a notice with regard

to coolies intending to immigrate to Natal. The notice promised that

they would be taken good care of and have clothing, food and

medication. They would be paid £5 a year and be indentured for five

years, after which they could return to India at their own expense,

or after 10 years they would get a free passage.



Sadly, many of these promises did not materialise and the reality is

that they were herded like animals into the holds of ships and food

and water were strictly rationed. Upon landing in Port Natal, they

found their white masters harsh. They worked long hours, lived in

tin houses and were flogged regularly.



The first ship to leave India was the SS Belvedere, which had

342 persons on board. The first ship to land in South Africa was the

SS Truro, which had 340 persons on board. The SS Truro had 101

Hindus, 78 Malabars, 61 Christians, 16 Muslims, one Marathi and a

few Rajputs.



The reason for my giving you the breakdown is to illustrate that

once on board, they all had to live and eat together and depend on

each other. Coming from a country where the caste system dominated

and dictated status, this in itself was a huge culture shock.

Muslims had to eat nonhalaal food and Brahmin Hindus had to mix with

the Dalits, the untouchables. So, the first lesson that we can learn
16 NOVEMBER 2010                         Page: 108 of 264


from the indentured Indians is that irrespective of class or caste,

we are all equal and need each other to survive.



What I find quite interesting is that when passenger Indians started

to arrive in South Africa, the caste system, based on the regional

identities, became firmly entrenched, so much so that the term

Kalkatias was given to the North Indians and the term Madrasis was

given to the South Indians. There was this unspoken convention that

Kalkatias and Madrasis married those of their own caste and

intermarriage between the two was frowned upon.



This convention persisted well into the 1980s and I speak from

personal experience. I am Hindi-speaking. My mom is Maraj from the

Brahmin caste by birth. My dad was a Sonar, which is a jeweller. My

husband is Gujarati-speaking. His mother is a Kshatriya or a

warrior, and his father is a Darjee or a tailor.



When we wanted to get married, we knew we were going to face some

difficulties and, boy, did we! If you think politics is rough, try

getting two families from different ethnic groups to agree to a

marriage. Fortunately, my dad was a good negotiator and we had a

happy ending.



While caste was not an issue for the indentured Indians, the term

“coolie” was, and many took umbrage. Kuli, spelt k-u-l-i in Tamil,
16 NOVEMBER 2010                         Page: 109 of 264


refers to payment for menial work for persons from the lowest levels

in the labour market and without customary rights.



According to Breman and Darial, on the transformation of “kuli” to

“coolie”:



   The distinct humanity of the indentured individual was, in a

   single move, appropriated and eliminated the person collapsed

   into payment.



In India the word is applied to the lowest class, and regarded as a

term of approach. Nowadays, the term is seldom used and, if I hear

it, I personally don’t take offence. In fact, I sent a tray of eats

to my colleague on Diwali Day and he sent me an SMS thanking me and

saying he had “flattened the driehoek coolie koekies” first.

[Laughter.] I burst out laughing, because I knew he meant well.



Nevertheless, despite all the hardships, the indentured Indians

endured, and they made their impact on the production of sugar, or

“white gold” as it was then referred to. European public opinion had

reacted favourably to the value of the coolies and in January 1965,

the Natal Mercury wrote:



   Coolie Immigration after several years experience is deemed more

   essential to our prosperity than ever. We certainly could not
16 NOVEMBER 2010                         Page: 110 of 264


   have boasted that our sugar exports increased four-fold in one

   year (sic).



Gandhi’s memorable ejection from a first-class train is well known

and I won’t dwell on it, but I would be failing in my duty if I did

not focus on his other roles. While in South Africa, he picked up

that proposed legislation in Natal in 1894 would deregister Indians

as voters. He gathered 10 000 signatures and forwarded the petition

to Lord Ripon, Secretary of State for the Colonies in London, and

the law was disallowed.



In August 1894, he got hold of the passenger Indians to found the

Natal Indian Congress, which was the first organised challenge to

the racist status quo. In 1896 Natal passed the Immigration

Restriction Bill and the Dealers’ Licence Bill, which effectively

denied trading rights to all Indians.



Gandhi’s persistence managed to reduce the residential tax for

Indians, who chose to remain as free labourers in the colony on

expiry of their contract from a punitive £25 to £3.



When he went back to India to fetch his family, he wrote a pamphlet

called The Indian Franchise – an Appeal. His intention was to inform

the world about the sufferings of Indians in South Africa. The

government of Port Natal went berserk and proceeded with legislation

to exclude Indians from trading. The Europeans threatened to push
16 NOVEMBER 2010                         Page: 111 of 264


every Indian into the sea. In 1913 the Immigrants Regulation Bill

classified Indians as prohibited immigrants and they were limited to

Natal.



Gandhi published a newspaper called the Indian Opinion. Without this

newspaper, the Satyagraha movement would not have been possible.

Gandhi’s grandson, Satish Dhupelia, says that were Gandhi alive

today, he would personally have led the campaign against the

Protection of Information Bill, which seeks to curb media freedom.



In 1913 a court judgement ordered that all marriages, except those

done according to Christian rites were nullified in South Africa. It

reduced the rank of an Indian wife to that of a concubine and the

children were deprived of the right to inherit.



This incensed the Indian indentured women and galvanised them into

action. Thousands from Natal went to the Transvaal to hold protest

meetings. They were arrested, because they had crossed the borders

without a permit. Valliammai, a 16-year-old, died in detention.



Their sacrifice was not in vain and resulted in the £3 tax being

abolished by the Indian Relief Act of 1914 and Hindu and Muslim

marriages were also recognised. Today we commemorate their

hardships, relive their history, and acknowledge our roots but, at

the same time, we claim our space and rights as South Africans.
16 NOVEMBER 2010                         Page: 112 of 264


What lessons can we learn from the indentured Indians? Eighty

percent chose to remain in South Africa after their indenture was

finished. Despite their atrocious conditions and hardships, the

strong spirit of determination to succeed prevailed. They built

places of worship and schools which still stand as monuments, a

testimony to them, and which benefit all of us today. Gandhi said:



   We can learn a lot from our Indian brothers and sisters’

   invaluable contribution to South Africa.



We have gained comfort from their pain and suffering.



One hundred and fifty years later no South African Indian should

have any doubts about their identity. We are South Africans. I am a

third generation South African of Indian origin. I live in a country

where democracy prevails and I can celebrate my mutual identity with

freedom. I am proud of my culture and religion and I’m regarded as

an equal citizen. As a South African Indian, I have a duty to

preserve and protect our age-old sacred cultural, moral and

religious values.



On behalf of the DA, I would like to wish all my Muslim friends Eid

Mubarak. We all have a link to that first Indian indentured labourer

who came to South Africa or, as he is referred to, Coolie No 1,

Devaram, and we walk proudly in their footsteps.
16 NOVEMBER 2010                         Page: 113 of 264


In conclusion, I would like to leave you with a quote from the

Bhagavad Gita:



  Man is made by his belief. As he believes, so he is.



[Applause.]



Mr M G P LEKOTA: Madam Deputy Speaker, I’m on a weak footing on this

subject of celebrating the Indian community in South Africa because

of the province from which I come and its history with this

community. I’m glad to say, though, that I happily join in with

others, knowing that all of us have been part of the struggle that

made the Free State also the home of the Indian community, like all

others.



Some 150 years ago the first Indian indentured labourers landed on

the shores of our country. They were brought to this country because

Africans, the original indigenous Africans of this country, were

resisting working on the sugar cane fields of Natal, as it was known

at that time. As a result of this resistance, the subcontinent of

India, which had already been subjected to British rule, made it

possible for Indians to be imported here as indentured labourers.



It’s an interesting bird’s-eye view to see that wherever there was

resistance to enforced labour, the colonial rulers of our country

visited other parts of the world and brought labour here, such as
16 NOVEMBER 2010                         Page: 114 of 264


from the East Indies to the Western Cape, or from China to

strengthen the working force in the Gauteng gold mines.



We celebrate this particular community – the Indian community –

today, and we have to look closely at the contribution they made to

our history, and not only to the industrialisation of the country,

as elements of labour here. At the same time they immediately joined

in the struggle for equality of status - for rights like everybody

else. That is particularly important because in 1860, with the

founding of the All India Congress - what was then called in India

the Indian Congress - the struggle against British imperialism in

India started. They brought this to the shores of South Africa, and,

in fact, this led directly ... [Interjections.] ... I’m not as

small-minded as that. We are celebrating South Africa and we are

celebrating the communities here. It has nothing to do with the

little things that there are here; it has to do with the value of

what the community has done, and I will address that issue.



We want to say that we own this country, its history over the

centuries, and we would be less South African if we thought that

there were certain parts of the history of this country which

belonged only to some and not to all of us - South Africa is for all

of us and it will always be so. If anything, that is the kind of

South Africa we want to build, a South Africa that is for all of us,

in which everybody is South African.
16 NOVEMBER 2010                         Page: 115 of 264


The fact that we may hold different views on this, that or the other

does not change that reality. Therefore, I say with pride that the

Indian South Africans who arrived at that time made history for all

of us. They set a timetable and a programme that has made all of us

the product of this country.



So, when they formed the Natal Indian Congress in 1894, they pointed

the way to the struggle in the future of a South Africa that was

quickly becoming a capitalist society, in which our own great

grandparents from the Transkei, the Free State and the North of this

country were moving towards Johannesburg to the mines, and to

Kimberley. It was Africa’s labour force. The working class of South

Africa was taking root.



As that was happening, South Africa’s urban centres were developing,

the townships of Sophiatown and others, which led to the forming of

Soweto. The townships of Durban led to uMlazi and with the

establishment of those townships South Africa was growing. The

township of Chatsworth and others were born as a general movement of

the development of the working class in our country. At that time,

none of the present political organisations were there, not then.

Therefore, we say that if we are to celebrate in full, we must

recognise the contributions made by these communities across decades

and centuries.
16 NOVEMBER 2010                          Page: 116 of 264


As we began the last century, the 20th century, just after 1910 we

saw the Indian community struggling to cross into the Transvaal

against a vicious, backward Republic of Afrikaners that did not want

them to settle there. A consequence of this was that at Volksrus in

1913 little Valliammai, at the age of 13, was killed as part of that

struggle to move into the Transvaal. That explains that it was the

success of that struggle that led to the situation that we have

today, a settled, very powerful part of the Indian community in the

Transvaal.



It’s a sad thing that happened in the Free State - there was not

sufficient economic development to lure them there in large numbers.

It’s also a shame that for so long a province like that sustained

legislation that denied them the right to make the Free State their

home.



We must see both the good things and the backward things that we did

to each other in our history, and we must be ashamed that some of

the things were done in that way. I say with pride that if the death

of little Valliammai inspired the struggle, it was to be reignited

much later in 1976 with the death of a little child of 13 years,

Hector Pieterson. It was history repeating itself, in different

circumstances but at same time generally driving in the same

direction.
16 NOVEMBER 2010                         Page: 117 of 264


So, we can take pride in the fact that all of us made equal

contributions, and spilled our blood for the same cause. By the way,

at the founding of the first liberation organisation in Africa, the

African National Congress, an argument arose as to what it was to be

called. The delegates who were at that meeting argued from various

angles, but they said that the name, whatever it was, had to include

the word “congress” because they were so inspired by the performance

of the Natal Indian Congress that they wanted an organisation that

would be capable of doing what the Natal Indian Congress had already

demonstrated, which was positive. That is the history of our

country.



The DEPUTY SPEAKER: Hon Lekota, as this is very important political

education, I’ve given you two minutes extra already.



Mr M G P LEKOTA: Madam Deputy Speaker, I would like to fast-forward

in history because I want to say that the Indian ...

[Interjections.]



The DEPUTY SPEAKER: Order!



Mr M G P LEKOTA: I would like to say that the contribution of the

Indian community in our country was not limited only to struggle

issues. The Indian cuisine that has now become part of and

characteristic of our culture came with them.
16 NOVEMBER 2010                         Page: 118 of 264


In the area of sport, the Indian community has made incredible

history. I want to recall that fact in regard to sports such as

hockey and golf. Let me remind you of this, and this Parliament must

take note of it. In 1964 Sewsunker “Papwa” Sewgolum, a self-taught

Indian who did not hold a golf stick according to what was taught in

academies and so on, competed against Gary Player and others, and he

beat them! But, let me tell you something that all of us must be

ashamed of. When he won and the prizes were to be given out, because

of the Separate Amenities Act he was not allowed to go into the club

to receive his trophy; he was made to stand outside and it was

raining. He was given his trophy there in the rain, with somebody

holding an umbrella over him! But, he had won the championship! I

see that we honour Gary Player, who was honoured by the old order;

fine, I also honour him. But I do think that we must honour Papwa

Sewgolum for the example he set our country. I thank you, but I say,

“Halala [Congratulations], the Indian community! Halala!

[Congratulations!]” [Applause.]



The DEPUTY SPEAKER: Halala! [Congratulations!] Thank you, hon

members. No, hon member, I took into account the fact that hon

Lekota has been here since August. Since this is the last week, he

really wants to put in everything for this term now! So please

excuse him. [Laughter.]



Mr M J ELLIS: Madam Deputy Speaker, I think the hon Lekota has

taught us all a lesson though, that if we want extra time we have to
16 NOVEMBER 2010                            Page: 119 of 264


talk very loudly into the microphone and you get to give us extra

time! [Laughter.]



The DEPUTY SPEAKER: You won’t succeed in that!



Mr N SINGH: Deputy Speaker, I think hon Lekota certainly scored a

hole-in-one with his last suggestion. [Laughter.]



Hon Deputy Speaker, it is a great honour for me to pay tribute today

to the first Indians to arrive on South African shores exactly

150 years ago, on 16 November 1860. Amongst those I honour today is

my grandfather who, as a 23-year-old, arrived on South Africa’s

shores from North India on 14 April 1897, when he disembarked from a

ship called the SS Umzinto. Ironically, uMzinto is still the area

where I reside today.



The contribution of my grandfather and the many other Indian

migrants between 1860 and 1911 is well documented but, I fear, the

contribution of the Indian community to our country has not yet been

fully assessed and not fully appreciated.



Amongst our country’s unsung heroes and heroines are undoubtedly the

first pilgrims from India who landed on our shores on board the

SS Truro. The Indian migrants came searching for greener pastures,

but for many these were the sugar cane fields of KwaZulu-Natal. My

grandfather too found employment in this industry, and as a young
16 NOVEMBER 2010                          Page: 120 of 264


man made a living working for a sugar cane company in Port

Shepstone.



History records that from the many trials and tribulations of the

Indian migrants emerged as many triumphs, and a sense of purpose

too. Indian people lived cheek by jowl with their African brothers

and sisters until 1966, when the Group Areas Act, which separated

all South Africans, came into effect.



However, this did not dampen the fighting spirit of the Indian

people. It was the South African Indian community who invested their

originally very scarce resources in the education of their children

and the upliftment of their social and economic conditions, so that

each subsequent generation could surpass their father’s one, not

only in terms of economic prosperity, but also in terms of

education, knowledge and awareness. This led to the establishment of

almost 400 community-built schools, mainly in KwaZulu-Natal.



Deputy Speaker, the arrival of our Indian brothers and sisters in

South Africa also led to a powerful relationship between India and

South Africa. Today, we laud the role of India in shaping the

political landscape of South Africa. India has left indelible

imprints on the human race over the course of centuries. Today,

India is not only a rising 21st century superpower, but the pace of

change in the world’s largest democracy, with its vibrant and open

society, is simply inspiring.
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History records that we – South Africa and India – share a common

past. Both of our countries were subjected to occupation by British

imperialists, and our hardships and experiences during our colonial

periods bear striking resemblances. I am proud that South Africa and

India’s special relationship was forged in the struggle against

racial oppression and discrimination.



However, despite the commendable relationship between our two

countries, the fact remains that, 150 years after the arrival of the

first Indians to our shores, many challenges still remain for South

Africa’s Indian community.



The perception that all Indian people are rich businessmen and women

is false, and has created, in my opinion, the myth that there are no

poor Indians in South Africa. This is simply not true. A quick tour

around KwaZulu-Natal, in particular, will reveal that some of the

poorest inhabitants of KwaZulu-Natal are, in fact, people of Indian

origin. It is with this in mind that I believe that there is an

urgent need for government and NGOs to do more to assist those

communities to access housing and other basic services.



In addition, clearly not enough has been done to preserve and honour

the culture, religion and traditions of the Indian community. But,

our constitutional imperatives are a great step forward. Currently,

the state broadcaster – and I’m glad that the Minister of

Communication will be participating in this debate – only flights
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102 TV programmes of interest to the community per week, while there

has been no concerted effort on the part of government to promote

Eastern languages. More schools, for example, could offer Eastern

languages as part of the curriculum. The issue of equal job

opportunities for young graduates is also a matter of concern.



It is my firm belief that it is important that we take advantage of

this moment in history to ensure the lasting and sustainable legacy

of the community. There have been many calls for national monuments

like at Curries Fountain in Durban and the Durban market, similar to

the Afrikaner Voortrekker Monument.



Professor Ashwin Desai, an author, suggests that such a centre, like

a memory bank or culture centre, should be constructed to bring

together into a central place a collection of photographs and

artefacts of the history of South Africans of Indian descent. Sadly,

the only centre in Durban, the Durban Documentation Centre, was

closed down recently.



Curry and rice and bunny chows are today two of KwaZulu-Natal’s, and

indeed South Africa’s, most favourite dishes, but the legacy of the

Indian community of South Africa is far greater than that of food

alone. South Africans of Indian descent have greatly enriched our

nation, especially so the province of KwaZulu-Natal.
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I want to end with the words of the president of our party, Prince

Mangosuthu Buthelezi, who has on numerous occasions paid tribute to

South Africans of Indian descent, and is on record as saying, and I

quote:



  Simply and plainly put, without the blood, sweat, suffering and

  toil of the people of the Truro and the many more Indians who

  followed them, South Africa would not be what it is today and

  would not enjoy the levels of prosperity, development and

  stability which we now have, and which, albeit far below our

  intended goals and aspirations, are nonetheless superior to those

  enjoyed anywhere else in sub-Saharan Africa.



I also want to wish members of the Muslim community Eid Mubarak for

tomorrow.



We all know that when you speak to an Indian he says, “Nothing for

nothing,” because nothing does come for nothing. I stand here today

as a proud South African of the IFP, and also as a person who is

proud of my heritage, roots and culture. Thank you very much, Deputy

Speaker. [Applause.]



Mr J J MCGLUWA: Deputy Speaker, as we gather today to celebrate the

arrival of Indians in South Africa 150 years ago, allow me to pay

tribute to the contributions made by the Indian community to all

forms of our nation’s development.
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On this day 150 years ago, Indians arrived on the shores of Durban

in various ships. They were brought here for the sole purpose of

working as slaves on the sugar cane fields of KwaZulu-Natal.



I doubt that their colonial masters had any idea that within a short

space of time the very slaves they had imported would become wise

and successful business people. Less than three decades later, many

Indians ventured out from being cane cutters to being cane growers.

Soon, several Indian slaves were successful entrepreneurs in their

neighbourhoods. Many of the slaves had the option of returning to

their motherland, but instead they remained behind and joined the

fight against oppression with their fellow South Africans.



We are especially proud of the role that Indians played in the

freedom of our nation. Under the guidance of Mahatma Gandhi, through

peaceful protest, they helped change the face of our nation through

nonviolent demonstrations.



From the early 1900s onwards the Indian community recognised the

evils of apartheid rule and the impact that the inequality was

having on their fellow African brothers. It is for this reason that

they stood side by side with them in the fight against racial

oppression and inequality.



The formation of the Indian Congress was a turning point in this

struggle, as the fight against the apartheid regime gathered more
16 NOVEMBER 2010                         Page: 125 of 264


support from the international community. However, whilst this

formation was Indian in identity, they remain to this very day

proudly South African.



On behalf of the ID, I wish to congratulate all Indians in South

Africa on the role they played in transforming our country, and the

ongoing contribution they make to the development of our nation. I

thank you. [Applause.]



Mr S Z NTAPANE: Hon Deputy Speaker and hon members, the UDM joins

the rest of the House in paying tribute to the Indian people who

arrived on our shores 150 years ago.



Since the arrival of those first indentured labourers, they have

left an indelible mark on the shape of our history. There can be no

denying that people of Indian origin have been inextricably linked

to the growth of our country. They have witnessed and experienced

the years of colonial rule and the subsequent rise and fall of

apartheid.



In that time their identity was reduced to a question of race

without regard to the richness of diversity among themselves. During

those decades, being an Indian meant being nonwhite and nonblack.

This arbitrary and immoral racial classification was the cause of

endless suffering and injustice. The former regime also mastered the

art of divide and rule and sought to inflame racial animosity
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between Indian people and people from other racial and cultural

groups.



Happily, those days are now behind us. Indian people played a very

significant role in bringing about democracy. For instance, one of

India’s greatest statesmen, Mahatma Gandhi, spent time in South

Africa and experienced our oppression at first hand.



Today, we can proudly celebrate the far-reaching role that the

descendants of those first indentured labourers have played, not

only in politics, but also in sport, culture, medicine, arts and

industry. They have been active contributors to the South African

nation. We salute their contribution. Without them our rainbow

nation would be distinctly less bright and colourful. Thank you, hon

Deputy Speaker.



Dr C P MULDER: Hon Deputy Speaker, I believe that if you had given

the hon Lekota a further 15 minutes, he would probably have also

lectured us on the founding of another congress. [Laughter.] But he

couldn’t get to that point. Thank you, therefore. [Laughter.]



On behalf of the FF Plus, I would also like to extend a word of

congratulations and thanks to our compatriots of Indian origin and

descent who are South African citizens for the role that they have

played over many years.
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I think it is also correct that we look at history from a different

angle. Even though it is true that a large majority, or the bulk, of

Indians came in 1860, it is also true that it is said that the first

person of Indian descent arrived in 1657. This was a lady known as

Mooi Ansiela. She was born in north-west India, and arrived with

Pieter Kemp on board one of the ships called the Amersfoort. She was

an employee or a slave of Jan van Riebeeck. In 1668 she was made a

free burgher and she was then allowed to do whatever she wanted in

regard to her slavery.



It is also interesting to note that slavery and the whole thing that

happened here was in 1860. In the two Boer Republics slavery was

abolished in 1854 in terms of their constitutions.



Now, the Chief Whip referred to the whole issue of unity and

diversity, and I have also listened to what our colleagues have said

today. I remember something from when I was a child. I was brought

up on the West Rand in Gauteng, and I remember many Sunday

afternoons in the early 1960s when there was not much to do. We

would get into our cars and drive to have a look at the beautiful

double-storey houses in Azaadville, where our Indian compatriots

were living.



Today things are different. Today Indians are, in terms of the

Employment Equity Act and affirmative action, considered as black.

Things have changed, but the important point I would like to make is
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this: No minority in a plural society will ever in the long-term

survive by claiming credentials through supporting the majority in

that sense. What we need in South Africa in terms of the

constitutional dispensation is the recognition of the rights of

different communities in terms of their cultural and linguistic

heritage, and to make provision for that in our constitutional

dispensation. That is where your future will lie, not in trying to

suck up to any majority, regardless of who that majority may be.

Thank you.



Mr S N SWART: Madam Deputy Speaker, the ACDP joins in celebrating

the 150th anniversary of the arrival of the Indian community in

South Africa, beginning in 1860 with approximately 152 000 ...

[Interjections.] ... if I’ve got time. It began in 1860 with

approximately 152 000 Indians coming to Natal between that year and

1911.



Many were made outrageous promises about luxurious living conditions

and a better life, whilst others were physically abducted and placed

on board ships. Families were torn apart through this process and,

as indicated by previous speakers, a five-year contract was offered,

renewable after five years with a sweetener of a return ticket.



The conditions on these ships were deplorable, with many succumbing

to diseases that spread. When they arrived here, they were subject
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to a physical examination in a manner very similar to how cattle

were examined before they were purchased.



There were no schools, churches or temples in place to allow some

degree of normality in their daily existence. Ironically, the first

Indian couple that stepped onto South African soil were a Christian

couple by the name of Mr and Mrs Devaram.



From humble beginnings the South African Indian community has

progressed to a point where, despite small numbers, they are playing

a leading role in the sociopolitical and economic life of South

Africa. This, against the background of being discriminated against

by whites who perceived them as an economic threat during apartheid.

Regrettably, the current policy of affirmative action is perceived

by many Indians as a means of marginalising them in favour of other

previously disadvantaged persons.



How did they then succeed? It was by implementing a simple yet

highly effective ethos under which they lived, namely a strong focus

on education and a solid family value system. This we should all

learn from.



The ACDP acknowledges the significant contribution that the South

African Indian community has made to the country. They brought

colour, spice and dance to South Africa that, it is argued, cannot
16 NOVEMBER 2010                         Page: 130 of 264


be replicated by anyone else in the world, except possibly by

Indians in India itself.



We in South Africa owe a similar vote of gratitude to the South

African Indian community who are first and foremost loyal and

dedicated South Africans. I thank you.



Mrs F HAJAIG: Deputy Speaker, comrades and colleagues, the following

text is a salute to all women who fought valiantly in our struggle

for liberation, and to celebrate the outstanding freedom fighters,

especially women of Indian ancestry, who have inspired us with their

bravery and commitment in the fight for justice and peace.



Today commemorates the 150-year anniversary of Indians’ arriving on

South African soil. The first Indians from Madras arrived on the

ship the SS Truro on 16 November 1860. On 4 October 1860, the ship

SS Belvedere had left Calcutta with 310 passengers. Great Britain

had introduced a new system of slavery in the form of indenture to

serve the needs of its developing colonial economies. Famine in the

north-western province of India contributed to 17 899 people

emigrating from Calcutta. On account of severe famine in South

India, 428 000 people left from Madras. Between 1860 and 1911, some

152 184 indentured labourers from across India came to South Africa.



The Indians signed a ludicrous statement of contract. It said:
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    We, the undersigned male immigrants, do hereby agree to serve

    the employer to whom we may respectively be allotted by the

    national government under the Natal Act No 14 of 1859, and we

    all understand the terms under which we are engaged, wages for

    the first year to be 10 shillings, ...



... not £10 ... [Interjections.] ... it was 10 shillings ...

[Interjections.] ... it was 10 shillings per year for the first year

-



    ... concluding with 14 shillings for the fifth year.



Many died on board the ships due to harsh, unsatisfactory

conditions, and those who arrived worked as cheap labour and lived

in inhumane conditions completely controlled by their employers.



Later, in the 1870s, the free Indians or so-called “passenger

Indians” who paid their own passage to Natal, the majority of whom

came from Gujarat as traders, artisans and workers, arrived.



For Indians, the laws treated them as migrants, and it was the

intention of the law to discourage them from staying longer in South

Africa. One measure was that the colonial government did not provide

any schooling for Indian children.
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Mohandas Karamchand Gandhi - the Mahatma - a young lawyer educated

in India and England, arrived in 1893 to start work in Pretoria on a

lawsuit. During his journey from Durban to Pretoria, a white

passenger complained about sharing a compartment with an Indian. He

was asked to go to the third-class compartment. He refused to do so

and was forcibly and unceremoniously thrown out of the train in

Pietermaritzburg.



In 1894, a year after Gandhi arrived in South Africa, the Natal

Indian Congress, NIC, was founded. Numerous discriminatory laws,

harsh taxation and unbearable conditions experienced by both free

and indentured Indians continued. The NIC’s aim of satyagraha was to

improve the rights of Indians in South Africa and to end the

practice of indentured labour. The Transvaal Indian Congress, TIC,

and Cape Indian Congress, CIC, were later formed. Three years later,

in 1919, the South African Indian Congress was born.



The British government rushed the Franchise Bill through Parliament

in 1898, followed by two more Bills aimed at passenger Indians, the

Immigration Restriction Bill and the Dealers’ Licences Bill, curbing

migration and trading. The white community obviously saw them as a

threat. In 1906, the Transvaal government passed a law making it

compulsory for Indians over eight years of age, children, to carry a

pass bearing their thumbprint. This caused outrage among the Indian

population. By the end of January 1908, 2 000 Asians had been

arrested for failing to register. Eventually Gandhi and the leader
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of the Chinese population in South Africa, a Mr Leung Quinn, reached

an agreement with Jan Smuts, the Transvaal Colonial Secretary,

whereby the Act would be repealed if everyone registered

voluntarily, but Smuts denied any promises made to Gandhi and, on

his way to the Registration Office, was duly assaulted.



Gandhi and members of the NIC and TIC were in and out of prison on

an ongoing basis as they led campaigns against unjust laws. In less

than a month, 300 Hindus, Muslims, Parsis and Christians became

members. Sohrab Rustomjee, Ahmed Cachalia, Ebrahim Asvat, Mohamed

Nagdee, Mr P K Naidoo and numerous other leaders were imprisoned. In

1913, Thumbi Naidoo succeeded in mobilising about 5 000 miners to

down tools to protest against the ₤3 tax imposed on them.



Unfortunately I have only four minutes left and I would like to

recognise the role of Indian women. I would quickly like to say that

little is known of their role in the Indian resistance movements,

for example, as they fought alongside the men to change the course

of history. Only recently did the Indian government honour a

young 16-year-old martyr, Valliammai Munuswamy Mudliar for her role

as a first-generation freedom fighter alongside Gandhiji, as

Mr Lekota, who has left, said.



Although Indian women have always played an important role in social

and communal life, much of their work in households and in their

families, supporting their men and children, was unrecognised. It
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was Gandhi who fought for this dramatic change in the role and

status of women in South Africa and India when, at his request, they

came out in large numbers from the shelter of their homes. Indian

women first embraced the struggle in 1913 by way of an open

invitation from the satyagraha association to join men in

retaliation for the Searle Judgment which invalidated all non-

Christian marriages. All Hindu, Muslim and Zoroastrian marriages

were declared null and void. This meant that all Indian married

women in South Africa were reduced to the status of concubines,

while the children were classified illegitimate and deprived of all

rights of inheritance, property assets and legal claims.



This was a hugely emotive cause; the very honour of Indian womanhood

had been insulted. By engaging in these activities, women broke out

of their traditional boundaries and challenged the images of the

passive and docile Indian woman and other issues such as the onerous

permit system and immigration laws, that is, prohibition of Indians’

moving from province to province. It was not so long ago that

Indians were not allowed to stay over in the Orange Free State. I

remember Chief Justice Ismail Mahomed of the Constitutional Court

was not allowed to sleep over while working on a judgment in

Bloemfontein.



In the 1920s and 1930s Indian women confined their work to culture

and charitable work, but by the beginning of the 1940s, confronted

by changing social and economic conditions, Indian women became
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politically motivated. Both professional and working-class women

began to take an active interest in politics. A comparative

assessment by the government’s Social and Economic Council revealed

that 70,6% of Indians, 38,2% of coloureds, 24,8% of Africans and

5,2% of white families were living below the poverty line. That

means that 70,6% of Indians as compared to 5,2% of white families

lived below the poverty line.



A large number of working-class households were dependent on female

breadwinners. During the war, the Communist Party of South Africa,

CPSA, sought to mobilise women around food supplies. In 1946, 1 000

Indian demonstrators led by the CPSA engaged in protest marches

against food controllers and black marketeers in Durban. Trade union

activity also served as a polarising agent as Indian women,

especially Hindu and Tamil women, were mainly employed in the

clothing, textile and food industries. For example, Rahima Moosa and

Fatima Seedat entered politics through their jobs with the food and

canning industry. Dr Goonam and Ms H Naidoo, together with NIC

members, mediated with management and contracted concessions for

Indian workers.



The struggle in India resulted in the imprisonment of Kasturba

Gandhi, Sarojini Naidu, Vijaya Lakshmi Pandit and Meera Ben. These

women served as role models for activists such as Zainab Asvat, Dr

Goonam, Zohra Bhyat, Manuben Sita, Mrs Amina Pahad, Mrs Zubeida
16 NOVEMBER 2010                          Page: 136 of 264


Patel, Ms Badat, Mrs R Jinn, Mrs Chella Chetty, Mrs Pillay, Mrs

Pather, Mrs Nair, and the list goes on.



The Passive Resistance Campaign 1946 to 1948 involved women from

different socioeconomic, religious and linguistic groups. The women

who assumed leadership roles in most instances were educated and

wealthy, came from politically active families and were victims of

racial and gender discrimination. They were in the main

predominantly Gujarati-speaking Hindus and Muslims. In Natal, the

majority of resisters were Tamil and Telugu-speaking Hindus, mainly

descendents of indentured labourers.



Mrs Rathamoney Padayachee was elected the secretary for the 1946

Women’s Action Committee ... Thank you. [Time expired.] [Applause.]



Mr R B BHOOLA: Deputy Speaker, the celebration of 150 years of our

history has for the first time highlighted for other communities the

struggles, the sacrifices and the massacres of indentured labourers.

We must not make the mistake of looking only at people after Mahatma

Gandhi, because there were other great heroes and heroines of the

struggle.



I would like South Africa to know that for 101 years in this country

the policy of successive white governments was: “Coolies, go back to

India!” In 1961 H F Verwoerd had the courage to stand up in
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Parliament and say that that policy had been abandoned and that the

Indians were now part of the permanent population of South Africa.



One should look at the concerns of the minorities, the concerns of

the Indian community. The manner in which policies are applied is

hurting them, yet they are South Africans. What we undoubtedly

require is Madiba’s definition of blacks, meaning Africans,

coloureds and Indians. The members of the Indian community are hurt

and they are wounded.



What we require is the assurance of the hon President of our country

to the Indian community that we will be treated as equal citizens

within the spirit of the Constitution, which grants every citizen

equality. The time has now arrived for a drastic change in the

policies relating to equality and affirmative action. They should be

replaced by another formula where there can be the levelling of the

playing fields. There is no sense in telling the Prime Minister of

India that Indians have made enormous contributions to the country,

and that we were doing well, when we are treated as second-class

citizens. Stand up in this Chamber and put Dr Verwoerd to shame!



As we continue to commemorate this historic event, let us never

forget the incredible contributions that the Indian indentured

labourers made in every facet of life. Let us remember the profound

words of Mohandas Karamchand Gandhiji, who said:
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   Happiness is when what you think, what you say, and what you do

   are in harmony.



The true strength of an Indian is not derived from his physical

form, but from his inner spirit. Today let us all commit ourselves

to delivering our people from the shackles of poverty, irrespective

of race, colour and creed, and march forward with courage,

conviction and determination. I thank you and also wish the Muslim

community Eid Mubarak for tomorrow. [Applause.]



The DEPUTY SPEAKER: I would like to say that we should notice that

the hon Bhoola is the only hon member who is always on the dot. If

he is given two minutes, it is going to be two minutes or less.

Thank you, hon Bhoola. [Applause.]



Mr K J DIKOBO: Madam Deputy Speaker, the history and record of the

indentured labourers of Indian origin in South Africa are a classic

example of how people can defy the odds and rise above their

circumstances. Their story can only be compared to that of the

Africans who were captured and transported across the Atlantic, and

sold as slaves in the Americas.



The comparison is relevant because in our view the difference

between indentured labour and slavery is insignificant. Of course,

as we tell this story, we are saying very little about those who

could have perished on the way, and we think there were many. Those
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who brought them to South Africa had possibly hoped that they would

forever be drawers of water and hewers of wood.



Azapo says they defied the odds, because they have become part and

parcel of South Africa. Many of them identified themselves with the

oppressed during the struggle for liberation. They rejected the

pseudo freedom of the tricameral system, and fought for true and

genuine freedom. We thank God that, despite the intentions of those

who transported them across the seas, we now have successful

businesspeople, lawyers, doctors, teachers, sports persons, and so

on.



We are paying tribute to them for the role that they have played in

bringing about democracy in South Africa. If we had the time and

space, we would mention some of them by name. I am paying tribute to

one of my political mentors, the late Cde Strini Moodley. We are

looking forward to a day when we will refer to these patriots just

as South Africans, without any reference to where they came from,

just as we do not refer to others as South Africans of German,

Dutch, English or Italian descent. Thank you. [Applause.]



The MINISTER OF COMMUNICATIONS: Thank you, Madam Deputy Speaker. Hon

members, I think the debate today is indeed an historic moment for

us. I listened carefully to the responses of the various political

parties, and it is outstanding how all of us have come together with

a common view in celebrating this historic moment of the 150th
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anniversary of the arrival of the Indian indentured labour in South

Africa. I was struck by the absence of any attempt by the political

parties to use this debate to score political points. They have

rather paid tribute to the common recognition that all our people

are giving to this historic event.



I must say that I was rather surprised that the hon Bhoola from the

MF still tried to be a bit of a tiger by bringing in a little bit of

politics, when he made comments about the feelings of the Indian

people towards the policies of the ruling party, which I did not

think was quite true.



The last speaker referred to Strini Moodley and I am reminded of

what Strini experienced when he was sitting on the beach in Durban

and dipping his feet into the sea, alongside his friend Steve Biko.

A white constable came up to Strini and said, “Hey you, what do you

think you are doing? Don’t you know this beach is reserved for

whites?” Strini looked at Steve Biko and then said, “Steve, tell him

- he doesn’t know.” The policeman looked very puzzled and asked

Steve what Strini was talking about. Steve said, “Well, don’t you

know that this is the Indian Ocean?” [Laughter.]



Sumit Chakravartty, in a foreword to a book called Gandhiji’s vision

of a free South Africa - a collection of articles by Enuga Reddy -

said that the establishment of a nonracial, democratic government in

South Africa under the leadership of Nelson Mandela - the vision of
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Gandhi - in a spirit of reconciliation remained a binding source of

strength and an inspiration to all South African people. In 1908

Gandhi said:

   If we look into the future, is it not a heritage we have to

   leave to posterity, that all the different races commingle and

   produce a civilisation that perhaps the world has not yet seen?



In paying a special tribute to the historic contribution of Gandhi

and his vision for the future of humanity, President Mandela said in

September 1992 that Gandhi was a South African and his memory

deserved to be cherished then and in post-apartheid South Africa. We

must never lose sight of the fact that the Gandhian philosophy may

be a key to human survival in the 21st century.



Connecting Gandhi’s contribution to national developments in South

Africa, Gandhi repeatedly emphasised until the end of his life that

he was both an Indian and a South African. He did not consider

himself as belonging to Indian South Africans alone, but to all

South Africans. He asserted without any trace of ambiguity that the

spirit of Gandhi lived not only in the hearts of Indians struggling

against racism and for a nonviolent democratic society, but also in

those of Nelson Mandela, Oliver Tambo, Archbishop Tutu, the

Rev Beyers Naudé and indeed many others.
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In recognition of the contribution that his South African experience

gave to the evolution of his ideas, Gandhi told the Kanpur Congress

in 1925:



   Indians of South Africa claim that they have given me to you. I

   accept that claim. It is perfectly true that whatever service I

   have been able to render ... to India, comes from South Africa.



Despite being born in India he, Gandhi, was certainly made in South

Africa.



Another feature of the special significance of his influence was the

friendship that emerged between Mahatma Gandhi and the Rev John

Langalibalele Dube, who was to become the first President General of

the ANC. Both men were involved in work for their communities;

Gandhi founded the Natal Indian Congress and Rev Dube founded the

Natal Native Congress, which was the precursor of the ANC.



Many historians have argued that this friendship and collaboration

inspired the joint co-operation between Indians and Africans in the

years of the freedom struggle that followed. History also gives

credit to the outstanding contribution of Dr Yusuf Dadoo, who

focused his attention on the building of an alliance of Indians and

Africans as the basis for the widest unity of the people against

racism. Dr Dadoo became an architect of the unity of all oppressed

people in the struggle to end racist tyranny, so much so that the
16 NOVEMBER 2010                          Page: 143 of 264


ANC honoured him in 1955 with the award of the decoration of

Isitwalandwe/Seaparankoe.



In his recent state of the nation address, President Zuma stated

that our country would mark the 150th anniversary of the arrival of

Indians. He affirmed that the celebration provided an opportunity to

recognise the important contribution of the Indian community in the

fields of business, labour, science, sports, religion and culture,

and the achievement and consolidation of our democracy.



From humble beginnings as cane cutters in the sugar cane fields in

KwaZulu-Natal to a significant presence in virtually every economic

facet of human lives, the Indian community have made an outstanding

contribution to the evolution of our democratic society. Today, the

sugar industry in South Africa ranks as one of the major

manufacturers of sugar and sugar by-products.



Whilst South Africa can boast that it is perhaps with humility,

people of Indian origin can also boast of the fact that their labour

pioneered this industry. Today, as we celebrate, we also recognise

the very perilous circumstances that these pioneers from India

faced. So, when we look at the economy today and the sugar industry,

viewed against the background of the conditions of work, one

sometimes does get angry, but by celebrating their arrival we salute

them for having made the contributions that they did even though

they lived under circumstances which were like slavery.
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One can also not discount the role played by indentured labourers of

Indian origin in the transport sector in Natal. Their labour,

together with British technology, successfully built the railway

network that we have today inherited in our country.



It is in the coal mines and the sugar fields that the seed of modern

day trade unionism was born in South Africa. Indian workers formed

their own unions, mainly in the sugar industry, and by the 1930s

gravitated towards the SA Communist Party. Nonracial industrial

unions were formed in the late 1930s with largely Indian leadership.

In some ways it is not without significance that Harry Naidoo, the

trade unionist, was about the first trade unionist to unionise

African workers in the sugar industry.



In 1952, when the Group Areas Act was passed, it was designed to

break both the economic and social fabric of people of Indian

origin. Notwithstanding all of this, among several activities, the

Indian leadership became a central part of evolving the resistance

movement in unity with African people and other democrats.



In 1955 the Indian leadership, together with the community, made

their mark at Kliptown in their participation in the development of

the Freedom Charter at the Congress of the People. Today their

presence is evidenced in significant numbers in the professional and

commercial stratums in society. They have had significant
16 NOVEMBER 2010                            Page: 145 of 264


achievements in the medical, legal and education fields and the

Public Service, and indeed in academia. The significance far

outweighs their numbers in relation to the size of the population.

They built in the spirit of the pioneers, who built their own

churches, schools, temples, mosques and churches, and in the spirit

of sacrifice and service. They are also respected and admired for

their exceptional entrepreneurial energy and enterprise, and for

always being ready to take the gap first.



The history of South Africa’s liberation struggle documents the

outstanding contributions made by many Indian compatriots to the

freedom struggle. Names such as Yusuf Dadoo, Monty Naicker, Dr

Goonam, Ahmed Kathrada, George Sewpersadh, Billy Nair, M J Naidoo

and Mewa Ramgobin stand out. In the ANC, the SA Community Party and

uMkhonto weSizwe names such as Mac Maharaj, Essop and Aziz Pahad,

Laloo Chiba and Ebrahim Ebrahim stand out as legends for the

contribution that they have made.



Today, as we mull over the struggles and tribulations of Indians in

South Africa, the insights bring home the poignancy of their

enslaved exile. Torn from their moorings, through sheer depth of

hardship and diligence they put down new roots, turned barren land

verdant and metamorphosed into loyal and abiding nationals of their

country of adoption.
16 NOVEMBER 2010                         Page: 146 of 264


Indians growing up in Africa have had a rich and challenging life of

immigration, indenture and struggle politics. I am a product of this

heritage. My forefathers came from the South of India, having left

behind a way of life, relations, culture, cuisine, music, language,

religion and rich ethic tradition. When Indians left India’s shores,

mainly for economic reasons, either as indentured labourers or

passenger traders, they brought along with them a fearless

determination to succeed and take on the character of the country of

their adoption, while retaining their religious and cultural roots.



I am a living example of this testimony of a proud heritage that my

forefathers built for me 150 years ago with their blood, their sweat

and their tears. And out of their toil I emerged, having

metamorphosed from various historical designations of coolie, ikula,

iNdiya, Asiatic, Indian, charra to the pinnacle of my new identity

as a fully-fledged South African. [Applause.]



I am a unique creation, unlike my counterparts in the rest of

Africa. I have a proud heritage of tilling the soil, picking up the

garbage, planting the vegetables, sweeping the streets, selling

fruit and vegetables in the marketplace, waiting at tables in

hotels, working in the coal mines, selling newspapers and driving

buses.



Though a victim of apartheid, I have a proud heritage of fighting

for justice and being in the vanguard against oppressive regimes
16 NOVEMBER 2010                                               Page: 147 of 264


with the higher-order principle of nonviolence. Now, after four

generations, I can proudly say: Mother Africa has defined me,

embraced me and moulded me into this unique product aptly described

as “conceived in India, but made in South Africa”. [Applause.]

Debate concluded.



The House adjourned at 17:48.

                                              __________



                  ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS



                                     FRIDAY, 12 NOVEMBER 2010



ANNOUNCEMENTS



National Assembly and National Council of Provinces



The Speaker and the Chairperson



1.   Recommendations on salaries, allowances and benefits of public office bearers



     (1)   The annual recommendations of the Independent Commission for the Remuneration

           of Public Office Bearers in respect of the salaries, allowances and benefits of public

           office bearers for the fiscal year commencing 1 April 2010 were submitted to

           Parliament on 11 November 2010 in accordance with section 8(5) of the Independent
16 NOVEMBER 2010                                              Page: 148 of 264


           Commission for the Remuneration of Public Office Bearers Act, 1997 (No 92 of

           1997), along with recommendations on the pension and pension benefits of former

           President K P Motlanthe in terms of section 2(5)(a) of the Remuneration of Public

           Office Bearers Act, 1998 (No 20 of 1998).

National Assembly



1.   Replacement of ICD annual report for 2009-10 with reprinted report



     (1)   At the request of the Minister of Police, in a letter dated 1 November 2010, the Independent

           Complaints Directorate Annual Report for 2009-10 [RP243-2010], tabled on 30 September

           2010 (ATC, p 2900), is hereby replaced with a reprinted report [RP243-2010] submitted on

           13 October 2010, along with Erratum submitted on 5 November 2010.

           Referred to the Portfolio Committee on Police for consideration and report.



                                    MONDAY, 15 NOVEMBER 2010



TABLINGS



National Assembly and National Council of Provinces



1.   The Minister of Trade and Industry



     (a)   General Notice No 991 published in Government Gazette No 33660 dated 15 October

           2010: Codes of Good Practice on Broad Based Black Economic Empowerment: Invitation

           to submit comments: Black Economic Empowerment Act , 2003 (Act No 53 of 2003).
16 NOVEMBER 2010                                             Page: 149 of 264




    (b)   Government Notice No R.924 published in Government Gazette No 33615 dated 15

          October 2010: Regulations in terms of the National Regulator for Compulsory

          Specifications Act, 2008 (Act No 5 of 2008).

    (c)   Government Notice No 898 published in Government Gazette No 33621 dated 11 October

          2010: Determination of threshold in terms of the Consumer Protection Act, 2008 (Act No

          68 of 2008).



    (d)   General Notice No 917 published in Government Gazette No 33581 dated 23 September

          2010: Notice to defer the general effective date in terms of the Consumer Protection Act,

          2008 (Act No 68 of 2008).



    (e)   General Notice No 827 published in Government Gazette No 33559 dated 16 September

          2010: Amendment: For written comments in terms of the National Gambling Act, 2004

          (Act No 7 of 2004).



    (f)   General Notice No 799 published in Government Gazette No 33459 dated 18 August 2010:

          Notice in terms of section 23 of the Counterfeit Goods Act, 1997 (Act No 37 of 1997).



    (g)   General Notice No 800 published in Government Gazette No 33459 dated 18 August 2010:

          Notice in terms of section 23 (1) and (2) of the Counterfeit Goods Act, 1997 (Act No 37 of

          1997).



National Assembly
16 NOVEMBER 2010                                            Page: 150 of 264


1.   The Speaker



     (a)   Report of the Public Service Commission (PSC) on the Key Drivers of Citizen Satisfaction

           with Public Service Delivery: Pilot Report 2009/2010 – April 2010 [RP 123-2010].

COMMITTEE REPORTS



National Assembly



1.   Report of the Portfolio Committee on Home Affairs on the South African Citizenship

     Amendment Bill [B 17B - 2010] (National Assembly – sec 75), dated 12 November 2010:



     The Portfolio Committee on Home Affairs, having considered the subject of the South African

     Citizenship Amendment Bill [B 17B - 2010] (National Assembly – sec 75) and proposed

     amendments of the National Council of Provinces (Announcements, Tablings and Committee

     Reports, 3 November 2010, page 3662) referred to it, reports the Bill with amendments [B 17 C –

     2010].



     Report to be considered.



2.   The Budgetary Review and Recommendation Report of the Portfolio Committee on Economic

     Development on the performance of the Economic Development Department for the 2009/10

     financial year, dated 02 November 2010.



     The Portfolio Committee on Economic Development, having assessed the service delivery

     performance of the Economic Development Department, reports as follows:
16 NOVEMBER 2010                                             Page: 151 of 264




1.   Introduction



The Economic Development Department (EDD) was formally established on 7 July 2009, following

the President of the Republic of South Africa’s, Mr Jacob Zuma, announcement of a new structure for

national government. The President stated on 10 May 2009 that “Cabine has been re-organised to

achieve better alignment between the structure, our electoral mandate and the developmental

challenges that need to receive immediate attention from government”.



During the Presidency Vote on 24 June 2009, the President stated: “The Economic Development

portfolio will have a strong domestic focus and will address, amongst others, matters of macro and

micro-economic development planning.” The new Department is, therefore, part of a new

configuration of government that centres on the four inter-connected areas of policy-development,

planning, effective implementation and continuous monitoring and evaluation.



The Department will be responsible to develop economic policy with a broad, cross-cutting focus so

that macro and micro-economic policy reinforce each other and are both aligned to the electoral

mandate. The Department will also be responsible for economic development planning and will work

collegially with other departments to ensure coordination around a programme that places decent work

at the centre of government’s economic policies in order to secure better employment outcomes.



1.1. The Mandate of the Committee, including the Provision of Section 5 of the Money Bills

Amendment Procedures and Related Matters Act, No. 9 of 2009
16 NOVEMBER 2010                                               Page: 152 of 264


According to Section 5 of the Money Bills Amendment Procedure and Related Matters Act, the

National Assembly, through its committees, must annually assess the performance of each national

department. Committees must submit an annual Budgetary Review and Recommendations Reports

(BRRRs) for each national department that falls under its oversight responsibilities for tabling in the

National Assembly.



These reports should be considered by the Committee on Appropriations when it is considering and

reporting on the Medium Term Budget Policy Statement (MTBPS) to the House.



The Portfolio Committee on Economic Development (the Committee), in undertaking the process of

compiling this report, has interacted and engaged with the Department and considered the following:

       Strategic Plan briefings, in terms of the Money Bills Procedures Act by both the EDD and its

        entities;

       Annual Report briefings, in terms of Section 65 of the Public Finance Management Act, No. 1

        of 1999, which requires that Ministers table the annual reports and financial statements for the

        department and public entities to Parliament; and

       First and Second Quarter Performance Report (2010/11) briefings by the EDD.



1.2.    The Mandate and Aim of the Department



Following the pronouncement of responsibilities of the Economic Development Department by the

President, the mandate of Economic Development includes economic policy development as well as

economic planning functions.
16 NOVEMBER 2010                                               Page: 153 of 264


The aim of the Economic Development Department is to promote economic development through

participatory, coherent and coordinated economic policy and planning for the benefit of all South

Africans. It will therefore:

       co-ordinate the economic development contributions of government departments, state entities

        and civil society;

       contribute to efforts that ensure coherence between the economic policies and plans of the state

        and state entities on the one hand, and the government’s political and economic objectives and

        mandate on the other; and

       promote government’s ability to achieve its goals of advancing economic development with

        decent work opportunities.



EDD will achieve its aim and mandate by promoting economic policy development, coordination,

planning, coherence and alignment:

       on national economic policy development challenges and programmes;

       through spatial economic development programmes;

       through the mandates and work of state entities responsible for economic regulation and

        financing of economic development;

       in interactions with business and organised labour to develop social consensus on economic

        development challenges, policies and responses;

       in policy work that maximizes the economic development impact in the domestic economy in

        its interface with the global economy



2. Department’s Strategic Priorities and Measurable Objectives



2.1. Strategic Priorities of the Department
16 NOVEMBER 2010                                                Page: 154 of 264




Four critical programmes determine the work of the Department. Within each of the programmes, the

Department identified a number of strategic priorities, which relate specifically to the purpose:

Programme 1: Administration

The purpose of this programme is to co-ordinate and renders an effective, efficient, strategic support

and administrative service to the Minister, Deputy Minister, Director-General, the EDD and its

agencies.



Programme 2: Economic Policy Development

The overall functions of this programme are to:

      develop South Africa’s path for economic growth and the creation of decent work;

      undertake work to ensure macro and micro economic policies that are coherent and aligned to

       the broader economic objectives;

      co-ordinate the economic development programmes of government;

      draw the links between different policy and programme areas and economic development

       objectives;

      engage with civil society and manage their contributions to policies for economic development;

       and

      conduct economic policy research that informs the formulation of appropriate economic

       policies.



Programme 3: Economic Development – Planning and Coordination

The purpose of this programme is to develop economic planning proposals for consideration by

Cabinet and for submission to the National Planning Commission to be incorporated in the wider

national plan.
16 NOVEMBER 2010                                               Page: 155 of 264




It will contribute the above-mentioned by:

      contributing to the coordination and coherence between macro and micro economic policies.

       This will be achieved through the development of these plans for the consideration of the

       Economic Sectors and Employment Cluster of Cabinet;

      providing oversight and strategic direction to certain development finance and related

       institutions and economic regulatory bodies;

      contributing to the work of other departments that are participating in African and regional

       institutions, international economic agencies and multilateral institutions; and

      building economic opportunities including the job creation potential of green economic

       activities.



Programme 4: Economic Development and Dialogue

The purpose of this programme is to promote social dialogue in order to foster economic development.

The Department envisage to:

      lead government in its dialogue with the social partners on matters pertaining to economic

       development and attempt to build consensus with, and acquire the active support of Labour,

       Business and the Community on government’s economic development policies, plans, goals

       and growth path for economic development;

      represent government in the discussions about the implementation of the Framework

       Agreement on South Africa’s Response to the Economic Crisis:

      develop the capacity of the social partners to engage in social dialogue, including at sectoral

       and workplace level; and

      enhance productivity, entrepreneurship and innovation.
16 NOVEMBER 2010                                            Page: 156 of 264


2.2. Measurable objectives of the Department



      Administration - The purpose of this programme is to co-ordinate and render an effective,

       efficient, strategic support and administrative service to the Minister, Deputy Minister,

       Director-General, the EDD and its agencies.



       Key activities from the operational plan include:

          o Implementation of the recruitment plan

          o Accommodation, furniture and equipment

          o Planning and reporting



      Economic Development Policy - to develop economic policies that (a) transform the structural

       economic problems in pursuit of decent work and green economy outcomes; and (b) address

       the negative growth and employment impact of the global economic crisis



       Key activities from the operational plan include:

          o Development of a paper on the Growth Path and consultation thereon

          o Policy/analytical papers on economic policy challenges

          o Policy platforms on economic policy challenges

          o Development of an economic model

          o Establishment of an economic development index

          o Establishment of database on the real economy

          o Proposal for the establishment of the Economic Development Institute
16 NOVEMBER 2010                                           Page: 157 of 264


     Economic Development: Planning and Coordination - The purpose of this programme is to

      develop economic planning proposals for consideration by Cabinet and for submission to the

      National Planning Commission to be incorporated in the wider national plan.

      Key activities from the operational plan include:

         o Strategic engagements with DFIs and ERBs

         o Strategy to enhance investment for economic development

         o Oversight of special financing for small businesses, targeted growth sectors and

             companies in distress

         o Interventions to leverage state expenditure and procurement

         o Engagements with international agencies and multilateral institutions

         o Submission of economic planning proposals

         o Engagements with provincial and local government

         o Production and review of sector plans

         o Production and review of spatial plans



     Economic Development and Dialogue - The purpose of this programme is to promote social

      dialogue in order to foster economic development.



      Key activities from the operational plan include:

         o Implementation of and reporting on the Framework for SA’s Response to International

             Economic Crisis

         o Social dialogue engagements

         o Capacity building engagements

         o Sectoral/workplace/national agreements facilitated with partners

         o Establishment of Advisory Panel on Economic Development
16 NOVEMBER 2010                                               Page: 158 of 264


              o Annual Conference on Economic Development



3. Departmental Allocations and Expenditure 2009/10

As an entirely new department formed after the 2009 elections, there was no budget in place for EDD

in May 2009 and the DTI established a division within their financial systems for EDD. This division

within the DTI, was allocated a budget of R29 million for the remainder of the financial year and the

DTI was reimbursed for the expenditure it has already incurred. It was agreed with National Treasury

that the DTI Director-General be the Accounting Officer for these funds for the 2009/10 financial year.

EDD’s transactions are reflected in the DTI’s Annual Financial Statements.



In addition to expenditure of R16.654 million incurred and paid for during the 2009/10 financial year,

commitments were made for expenditure on capital assets amounting to R1.107 million. The total of

expenditure and commitments for 2009/10 was R17.761 million or 61.24% of the adjusted budget

allocation.



Commitments represent goods and services that have been ordered, but not delivered and paid for at

the reporting date. This amount of R1.107 million was not recognised in the statement of financial

position as a liability or as expenditure for 2009/10 because the annual financial statements are

prepared on a cash basis of accounting, but are however included as part of the disclosure notes.



Table 1: Management accounts for EDD for 2009/10

  Economic                   Adjusted         Expenditure and variance 2009/10

  Classification             Budget

                             2009/10          Budget       Expenditure Variance %

                                                                                     Variance
16 NOVEMBER 2010                                                  Page: 159 of 264


                                 R’000            R’000        R’000         R’000      R’000

     Compensation            of 12.644            12.644       7.865         4.779      37.79%

     employees

     Goods and services          10.355           10.355       6.349         4.006      38.69%

     Capital Assets              6.001            6.001        2.439         3.562      59.35%

     Total budget                29.000           29.000       16.654        12.346     42.57%



4.        Analysis of the Department’s Annual Report 2009/10

The Minister of Economic Development, Mr Ebrahim Patel, presented the Annual Report 2009/10 to

the committee, which is the first Annual Report of the Department, since its establishment in May

2009. The Annual Report 2009/10 outlines the setting up of a new department of government, the

work and activities it undertook between May 2009 and March 2010.



EDD was accounted for as a division within the Department of Trade & Industry (DTI), with an

allocated budget of R29m.



The Annual Report 2009/10 included the following work and activities undertaken by the EDD from

May 2009 to March 2010. The Annual Report 2009/10 reported the following:



Establishment of the Department

           As it was a new Ministry, it was necessary for the Ministry to establish a basic infrastructure

            and staff support immediately after taking office. Accommodation was secured on the DTI

            Campus, Pretoria. A process of rapidly procuring furniture, telephones and office equipment

            was undertaken. Basic office supplies were also purchased for the new Ministry.
16 NOVEMBER 2010                                               Page: 160 of 264


       Office accommodation was also secured in the Parliamentary precinct at 120 Plein Street. The

       Ministry appointed an Establishment Manager for the remainder of the financial year.

       Work on the Strategic Plan of the department started in June 2009. The final draft was

       completed in September 2009. The draft informed the organisational structure and the medium

       term expenditure framework (MTEF) budget of the Department. The Strategic Plan was tabled

       in Parliament on 03 March 2010 as required by Parliament in accordance with the Money Bills

       Amendment Procedure and Related Matters Act, 2009.

       The Minister held consultations with colleagues regarding the agencies that should report to

       EDD in view of its mandate. It was subsequently agreed that six (6) agencies should be

       transferred from the DTI to the EDD: three regulatory bodies (The Competition Commission,

       the Competition Tribunal and the International Trade and Administration Commission (ITAC)

       and three development finance institutions (the Industrial Development Corporation (IDC),

       Khula Enterprise Finance Limited (Khula) and the South African Micro-finance Apex Fund

       (Samaf)).

       On 10 December 2009, the Minister for Public Service and Administration determined, in

       terms of section 3(4) (b) of the Public Service Act, 1994, that the oversight functions relating to

       these entities be transferred from the DTI to EDD with effect from April 2010, subject to the

       transfer of the relevant legislation from the Minister of Trade & Industry to the Minister of

       Economic Development in terms of section 97 of the Constitution of the RSA, 1996.



Responding to the recession

      Much of the EDD’s work during the period under review was addressing South Africa’s

       response to the global economic crisis. In July 2009, the Minister of Economic Development

       was requested to convene and chair the Leadership Team of business, labour, community and

       government representatives that was created in the Framework.
16 NOVEMBER 2010                                              Page: 161 of 264


           o One of the instruments to deal with the challenges of the recession was the National

               Jobs Fund, which is utilized to finance a Training Layoff scheme to support companies

               experiencing weakening demand for their products, by providing an alternative to

               retrenchments. A sum of R2, 4b was drawn from the Unemployment Insurance Fund

               (UIF) and the National Skills Fund to pay allowances to workers on special training

               schemes. A further R500 million was committed by a consortium of SETAs to pay for

               the costs of funding the training offered under the scheme.

           o The second instrument was a Fund for companies in distress as result of the crisis. The

               money was made available through the Industrial Development Corporation.

           o The third instrument was a development bond placed by the IDC with the UIF, of R2b.

           o A range of measures to combat customs fraud were also introduced.

           o The Competition Commission launched investigations into collusive practices on food

               prices.



Developing dialogue

      This Chapter set out seven workstreams, which included: The Leadership Team’s work in

       response to the recession; Policy Platform of the global economic crisis; KwaZulu-Ntal

       Platform on Rural Development; Policy Platform on income inequality; Next Economy

       National Dialogue; Engagement in Nedlac and the Ministerial roundtable with the

       pharmaceutical industry.



The New Growth Path

EDD has coordinated government work on a new growth path. The following three workstreams sum

up the work to date.
16 NOVEMBER 2010                                            Page: 162 of 264


      Research and policy work – Research towards the new growth path commenced in 2009. A

       framework for the growth path was developed, the approach was adopted of identifying key

       “job drivers” in the economy, i.e. sectors with a high employment potential. Research was

       undertaken in these areas and initial estimates on the numbers of jobs that could be realised

       were made. EDD consolidated this research into a draft Growth Path document.

      Workshops and policy sessions – Following the broad conceptual work on the growth path,

       EDD hosted a number of Departmental workshops and consultations to draw in external

       expertise and tap into the work that has been done elsewhere. A workshop focusing on the

       exchange rate was held on 7 December, which identified a range of interventions used by

       governments across the world to address exchange-range competitiveness challenges. The

       EDD also conducted workshops with the IDC on the Growth Path, which identified areas of

       data and research, and considered the outcome of IDC work sources of new job growth.

      Processes in the Economic Cluster and within government – the EDD worked closely with the

       Economic Cluster in developing key issues in the growth path.



Provincial Coordination

      Economic Development MinMEC - On 11 August 2009, the first Economic Development

       MinMEC was held with 6 provincial MECs and their Head of Departments. The MECs tabled

       their provincial priorities, challenges and opportunities. The meeting agreed to convene an

       economic development symposium.

      The Economic Cluster Research Forum – EDD co-hosted a research forum on 30 September

       2009 to encourage greater research cooperation amongst provincial and national economic

       development departments.

      MinMEC Symposuim – A MinMEC economic development symposium was held over 16-17

       November 2009 in Pretoria.
16 NOVEMBER 2010                                               Page: 163 of 264




Parliament

         Presidency Budget Vote – the Minister participated in the Presidency Budget Vote debate on

          24 June 2009 and spoke on international economic relations.

         Global economic crisis – Due to the keen interest in the progress in responding to the

          international economic crisis, the Minister addressed the National Assembly on 20 August

          2009.

         Budget Vote No. 27 – Minister Patel made his first Budget Vote address to the National

          Assembly on 23 March 2010.



International work

         During the period under review, the Department’s work on international matters largely

          focused on policy development, particularly on regional economic integration. In addition,

          bilateral meetings were held with Ministerial counterparts on bilateral visits to SA,

          ambassadors from a number of countries and representatives of international economic

          institutions and organizations. The Minister launched the Employment Creation Fund during

          the European Union/South African bilateral Summit.



5.       First and Second Quarter Performance Reports of the Department for the 2010/11

Financial Year




Expenditure in the first six months of 2010/11 is R 171.003 million or 40.9% of the main appropriation

of R 418 million for the year as a whole. Spending is marginally below the norm due to the high

vacancy rate associated with the start up and initiation of operations in the new department.
16 NOVEMBER 2010                                            Page: 164 of 264




Table 2: Programme 1 (Administration)


                                 YTD EXPENDITURE


    Per Sub-         Q1            Q2            YTD        % Spent          Main

  programme                                                             Appropriation


  Ministry          5, 807        5,539         11,346       69,64%         16,292


  Office of the      615           942           1,556       33.54%          4,640

  DG


  General            198           1389          1,587        6.65%         23,870

  Management

  Services


                    6,620         7,870         14,490       32.34%         44,802




Table 2 above indicates Programme 1 (Administration), from a budget of R 44,802 million, Year to

Date (YTD) expenditure as at 30 September is at R 14.490 or 32.3% of the budget. The spending is

below the 50% norm by 17.7% due to slow spending arising out of the current vacancy rate.
16 NOVEMBER 2010                                             Page: 165 of 264




Table 3: Programme 2 (Economic Policy Development)

                                  YTD EXPENDITURE


     Per Sub-            Q1              Q2    YTD       %              Main

   programme                                            Spent      Appropriation


  Growth Path             -              168    168    3.52%            4,789


  Economic                64             468    533    8.12%            6,555

  Policy


  BBBEE                   -               -       -    0.00%            4,738


  2nd Economy             -               -       -    0.00%            2,068


                          64             637    701    3.86%           18,150




The expenditure of programme 2 (Economic Policy Development) (Table 3, above) amounts to R700

000 or 3.9% of the budget of R 18.150 million, which is much less than the main appropriation budget.

Slow spending in this Programme is largely informed by the rate at which posts are filled because

EDD is in its first year of operation.
16 NOVEMBER 2010                                           Page: 166 of 264




Table 4: Programme 3 (Economic Planning and Coordination)

                                   YTD EXPENDITURE


      Per Sub-programme             Q1         Q2         YTD          %         Main

                                                                     Spent     Appropri

                                                                                 ation


  Spatial, Sector and Planning       -         195         195       1.57%      12,409


  Economic          Development,     -          -           -        0.00%       3,806

  Financing and Procurement


  Investment for ED                32,432    39.792       72,224     46.11%     156,634


  Competitiveness and Trade        60,085    23,309       83,394     48.61%     171,552

  for decent work


                                   92,517    63,296      155,813    45.24%      344,401




The actual spending of programme 3 (Economic Planning and Coordination) (Table 4, above)

indicates that from a budget of R 344.401 million, a year to date expenditure for programme 3 is R

155.813 million or 45.2% of the budget.
16 NOVEMBER 2010                                    Page: 167 of 264




Table 5: Programme 4 (Economic Development and Dialogue)

                             YTD EXPENDITURE


   Per Sub-         Q1          Q2          YTD        % Spent         Main

  programme                                                        Appropriation


National Social      -           -            -            0.00%       7,862

   Dialogue


   Sector and        -           -            -            0.00%       400

workplace social

    dialogue


   Capacity          -           -            -            0.00%       1,710

building for ED


 Productivity,       -           -            -            0.00%       1,451

Entrepreneurship

 and Innovation


                     -           -            -            0.00%      11,243
16 NOVEMBER 2010                                                Page: 168 of 264


There is no spending to date for programme 4 (Economic Development and Dialogue) (Table 5) from

a budget of R 11.243 million. The under spending here is also caused by reasons that officials in the

Branch of Economic Development and Dialogue have been erroneously paid under Programme 1. This

will be corrected by correcting Persal allocations and effecting journals.



Overview of Revenue

The departmental revenue collection in the first six months of 2010/11 is R 67.659 million or 29% of

the estimated revenue of R 230 million for the year as a whole. There is no comparison with mid-year

revenue collections in 2009/10 since EDD is currently in its first financial year of operation as a

budget vote. The main revenue generator for the department is fines from penalties from the

Competition Commission.


6.   Auditor-General’s Report


EDD was accounted for as a division within the Department of Trade & Industry (DTI), with an

allocated budget of R29m. The Auditor-General’s Report, on these funds was thus included in the

financial statements of the DTI.



7.   Consideration of reports of the Committee on Public Accounts


The Department did not appear before the Committee on Public Accounts.


8.   Entities reporting to the committee


The committee interacted with the entities on their Annual Reports 2009/10. Some of the highlights of

these interactions include the following:


8.1. Competition Commission
16 NOVEMBER 2010                                              Page: 169 of 264


The Competition Commission is a statutory body constituted in terms of the Competition Act, No 89

of 1998 by the Government of South Africa empowered to investigate, control and evaluate restrictive

business practices, abuse of dominant positions and mergers in order to achieve equity and efficiency

in the South African economy.

Committee observations:

      AG’s Report - The Competition Commission received an unqualified Auditor-General’s Report

       for the 5th consecutive year.

      Investigating cases brought by the public - Members of the public may approach the

       Competition Commission if they suspect that there might be collusion in any sector, where the

       Commission will investigate and a decision have to be made whether to pursue with the case or

       not. The Commissioner can also initiate cases (pro-actively).

      Processes of Appeal against the decision of the Tribunal - There are 3 processes of Appeal

       against the decision of the Tribunal: First the Tribunal Appeal Court, then the Supreme Court

       of Appeal and then the Constitutional Court.

      Budgets of the Commission (2009 and 2010) - In 2009, the Commission received a government

       grant of R44m and in 2010, R80m.

      Fines/penalties paid by companies - The fines/penalties which the companies pay are not

       reflected in the financial statements of the Commission. The fines/penalties go to the national

       fiscus.

      Fee income amounts - Fee income amounted to R50m in 2009, and R30m in 2010.

      Financial planning by the Commission: The Commission were initially ambitious in their

       planning, where more funding was requested from Treasury, but the result was that they

       received less than what they requested.




8.2. Competition Tribunal
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The Competition Tribunal has jurisdiction throughout South Africa and adjudicates competition

matters in accordance with the Competition Act (Act 89 of 1998). It is subject to the Constitution and

the law and acts independently. When a matter is referred to it the Tribunal may:


       grant an exemption from a relevant provision of the Act


       authorise a merger, with or without conditions, or prohibit a merger


       adjudicate in relation to any conduct prohibited in terms of the Act by determining whether

        prohibited conduct has occurred, and if so, impose a remedy provided for in the Act


       grant an order for costs.


Committee observations:


       Disabled employees: The Tribunal does not currently employ any person with disability.


       Staff promotion – there have been instances where staff (especially Case Managers) was

        successful in applying for higher positions at for example the Competition Commission. Staff

        generally gain initial experience at the Tribunal and then they move on to more senior positions

        at the Commission.


       Job losses of possible mergers – All stakeholders are involved if there are any job losses due to

        mergers especially the trade unions


       Fruitless and wasteful expenditure of R3 368 – according to the Tribunal, the South African

        Revenue Service (SARS) indicated that the Tribunal owed them the amount for a PAYE

        shortfall in March 2007. According to the Tribunal they paid this amount in April 2007 and

        therefore disputed the liability. The Tribunal expects this liability to be reversed.


8.3.    International Trade Administration Commission of South Africa
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International Trade Administration Commission of South Africa (ITAC) was established through an

Act of Parliament, the International Trade Administration Act 71 of 2002, which came into force on 1

June 2003.




The aim of ITAC, as stated in the Act, is to foster economic growth and development in order to raise

incomes and promote investment and employment in South Africa and within the Common Customs

Union Area by establishing an efficient and effective system for the administration of international

trade subject to this Act and the Southern African Customs Union (SACU) Agreement. The core

functions are: customs tariff investigations; trade remedies; and import and export control.


Committee observations:


   Aluminium investigations – It is a review of tariffs, which has arisen from IPAP 1, who identified

    intermediate inputs which included aluminium with regard to a review by ITAC, with a view of

    reducing the costs for downstream value added goods. A recommendation was made to the

    Minister and the duties were reduced. After this, producers came back to ITAC indicating that

    some of the raw materials had to be imported, which has then increased their input costs. The

    investigation had to be reviewed and ITAC is at an advance stage to make a recommendation to the

    Minister.


   Import permit for vehicles – Import permits are for second hand vehicles and no permits is issued

    for new vehicles. Permits are also issued for vehicles which are utilized by people with disabilities.


   Struggling Textile and Clothing industry – one of the problems is the under valuation of imported

    clothing and textiles, which erodes the tariff protection. Tariff protection for clothing has recently

    been increased from 40 – 45%, fabrics extended to 22%. There is a unit within SARS that deals

    with under-invoicing.
16 NOVEMBER 2010                                                  Page: 172 of 264


   Replacement of the Textile and Clothing Incentive Development Plan (TCIDP) – the TCIDP has

    been replaced by the Production Incentive Scheme, which is part of the DTI strategy, which is in

    full implementation including skilling and upgrading.


   Promotion of local goods produced – where there is domestic production, especially downstream

    there are tariffs. Domestic production is supported with tariffs.


   Relationship with SARS – Once a recommendation is made by ITAC to the Minister of Trade and

    Industry, the Minister requests the Minister of Finance to implement. The implementation is

    performed by SARS. SARS and ITAC also work very closely on import and export permits.


   Skills of employees – in order to perform the functions at ITAC you need to gain the necessary

    experience within ITAC itself, and the tertiary institutions will not be in a position to offer this.


   Investigation on wheat and sugar – An investigation was performed which resulted in the

    protection of domestic producers, especially the farmers.


   ITAC’s link with IPAP II – IPAP II states that ITAC must continue to conduct applications for

    selective tariff increases or decreases. ITAC therefore takes a developmental approach to tariffs.

    Where the focus is on the outcomes e.g. domestic production, employment, international

    competitiveness etc.


   Investigation on tyres from China – ITAC did undertake an investigation into the issue of tyres

    from China. No evidence was found of dumping and injury. ITAC was challenged by tyre

    manufacturers in the High Court, where the manufacturers were successful, but ITAC appealed

    which was granted.


   Exceeding targets for export and import permits – the reason for exceeding the target is because it

    is based on historical data. ITAC under estimated, because there were more applications then

    expected.
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   Irregular expenditure – The irregular expenditure amount is R155 000 and the amount (loss to

    fraud) directly related to the official, is R12 000. The official was on suspension for 6 months

    while the investigation was conducted.


   Surplus of R4.3m in 2008/9 – Interest received was initially budgeted conservatively, but R1.5m

    was received as interest and another big driver of this surplus was the fact that at the start of that

    financial year there was a staff compliment of 130 and at the end of the financial year 114.


8.4. Industrial Development Corporation


The Industrial Development Corporation of South Africa Ltd (IDC) is a self-financing, national

Development Finance Institution (DFI). It was established in 1940 to promote economic growth and

industrial development in South Africa. The mandate of the IDC, includes the rest of the African

continent and they are active throughout the entire region. They operate in a broad spectrum of

industries and with their specialized knowledge and experience; they are able to offer valid and

appropriate financial assistance to a wide variety of individuals and companies.


Committee observations:


   People’s reluctance to invest – people are reluctant to invest in businesses during the recession. If

    the country wants to be competitive, it would need to invest on best practices and bet processes.


   UIF Development Bond – The IDC borrows money from various sources of which the UIF is one

    and the rates that the IDC is paying in relation to these loans is lower than the markets.


   Progress on the Joulle project – The Joulle project is still in its development phase, where the

    prototype has been produced. The IDC has however not taken a decision to invest on a commercial

    scale. The IDC is still in the process of assessing the risks and exploring the possibilities of

    partnerships. If the IDC finds that the project is not viable, that it would “walk away” from the

    project.
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   Investments in bio-fuel – The IDC’s approach are one that underlines non-competitiveness with the

    food industry.


   IDC’s role in steel pricing – The IDC is a minority shareholder in ArcellorMittal, with the result

    that it has little influence as these decisions are taken by the majority shareholder.


   Automotive components – last year the main focus on components was on survival. There are

    however signs that the in terms of motor assembly plants are moving in the direct direction, where

    there is an upswing and where the IDC is in the process of funding a number of local

    manufacturers.


   Developments at Coega – Coega did not develop as expected. The IDC does not deal with

    industrial development zones (IDZs). One of the core projects of Coega was the Aluminium

    Smelter, but due to the electricity crisis the project had to be canned. The IDC is however looking

    at other investments in the region. Coega would need more critical mass in order to be successful

    as an IDZ.


   Funding to companies in distress – The uptake of the funding is below the expectations of the IDC,

    with R1.4 billion approved of the R6.1 billion allocated for the period to March 2011. Twenty eight

    (28) companies in distress has been assisted by the IDC.


   Advocacy campaign regarding funding to companies in distress – The IDC had several interviews

    in a variety of media; it also had a number of workshops, and 20 of these were held with the

    relevant sectors.


   Investments in the rest of Africa – according to the IDC there is an increased demand and the target

    was exceeded due to the projects, which required large capital investments, for example the sugar

    plant in Tanzania.
16 NOVEMBER 2010                                                 Page: 175 of 264


   IDC’s percentage of the 500 000 jobs to be created - The IDC was responsible for 8% of the 500

    000 jobs to be created. Within this number the IDC only focused on long term employment and not

    on short term employment.


   Bonuses to staff – Bonus offered to staff costs in 2009/10 is much lower than what was expected

    and this affected the figures.


   The committee noted that more time to scrutinize the Annual Report of the IDC should be made as

    there are still outstanding issues to be discussed with them. A follow-up meeting need to be

    scheduled with IDC.


8.5. Khula Enterprise Finance Limited

Khula Enterprise Finance Ltd (Khula) is dedicated to the development and sustainability of small

businesses in South Africa. A leader in its field, it has a proud history of more than 13 years' service

of involvement in the rapidly growing and economically vital, small and medium enterprise (SME)

sector.

The company is a wholesale finance institution which operates across the public and private sectors,

through a network of channels to supply much-needed funding to small business. Khula's channels

include South Africa's leading commercial banks, retail financial institutions, specialist funds and joint

ventures. Its primary aim is to bridge the "funding gap" in the SME market not addressed by

commercial financial institutions.


Committee observations:


         Khula’s existence since being established – since Khula’s inception it disbursed R2,5 billion. In

          2002 the loan book was R34m and in 2010 it grew to R640m. Bad debt stood at R40% in 2002

          and in 2002 it declined to 12%. The institution grew but maintained risk at an acceptable level.
16 NOVEMBER 2010                                               Page: 176 of 264


       Mentorship provided by Khula – Khula emphasised that the mentorship provided will be

        intensified, where mentorship will become critical with the loans provided. Khula has an

        agreement with Seda, with regard to pre-loans and once these loans are approved Khula will

        assist.


       Footprint of Khula – A Memorandum of Understanding has been signed with Seda, since they

        have a bigger footprint than Khula. The Post Office is also a possible partner in order to extend

        Khula’s footprint throughout the country.


       Implementation of Khula Direct – The Business Plan for Khula Direct was approved in 2008

        and in 2009, the modelling and design was developed as well as the implementation plan. It is

        envisaged that Khula Direct will be rolled-out at the beginning of next year.


       Recovery of debts (‘Bad debts”) – According to Khula, “bad debts” is a market wide challenge,

        and the global economic crisis contributed to this and when making loans available, it is a

        systemic risk that Khula have to take.


       Khula’s relationship with Retail Financial Institutions (RFIs) – Khula acknowledged that the

        relationship with RFIs need to be reinforced. Khula have developed a booklet which have been

        distributed country wide, which informs members of the public on how to access funds for

        SMEs. Khula reiterated that it was established as a wholesale financier, which means it does

        not lend directly but where it lends money to intermediaries, who in turn lend money to

        businesses. It is exactly for this reason that the implementation of Khula Direct is fundamental,

        where they will have a greater impact on SME development in the country.


       Meetings of the audit committee – the committee met four (4) times during the period under

        review (in accordance with the PFMA).


8.5.    South African Micro-finance Apex Fund
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The South African Micro-finance Apex Fund (Samaf) is a wholesale fund that distributes its funds

through Retail Financial Intermediaries (RFIs). The term “financial intermediary” refers to a wide

range of Financial Institutions dedicated to the provision of small scale financial services to the

Enterprising and working poor households. It includes Non Governmental Organizations (NGOs),

Savings and Credit Cooperatives (SACCOs), Financial Services Co-operatives (FSCs), Co-operative

Banks, private commercial banks, and non-bank financial institutions (MFIs).



Committee observations:

      Report of the Auditor-General – Samaf received a qualified report from the Auditor-General.

       The basis for the qualified report referred to: A number of journals were passed during the

       system implementation process; and. Management failed to provide sufficient and appropriate

       explanation to substantiate journals.

      Credibility of the information provided – Samaf acknowledged that certain information needed

       a survey mechanism, which was lacking, and that certain information was not credible, but they

       noted that they are in the process of putting systems in place to rectify and address these issues.

      Comments by the Auditor-General’s report – On the Management letter, Samaf created a

       matrix where employees are responsible for their actions on a monthly basis. They expect

       improvements after this intervention and assured members that they will have an unqualified

       report.

      Irregular expenditure by employee – the irregular expenditure occurred when an employee

       went outside of the tender processes to procure, but highlighted that the specific employee was

       unaware of the correct procedures to be followed.

      Material impairments as a write-off – The material impairments were a provision and not a

       write-off.
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     Capacity building of institutions – Capacity building of institutions, by Samaf, will be

      fundamental in the sustainability and viability of these institutions.

     Appointment of 14 interns – Samaf intends employing 14 interns who will assist with

      administration work.

     Revised Human Resource structure proposed – Samaf have reviewed their current structure and

      new one has been developed which is awaiting approval and one of the reason for the

      reviewing of the structure is because provinces need additional staff.

     Legal action against intermediaries to recover debt – Legal action has been taken by Samaf

      against intermediaries to recover debt owed to Samaf, but Samaf acknowledged that if they do

      go the legal route to recover money owed, that it will certainly be to the disadvantage of

      institutions, as this will lead to the closing down of some of them.

     Information gathering from Financial Intermediaries (FIs) – Gathering the necessary

      information from FIs remains a challenge for Samaf.

     Risk Management Audit – The Risk Management Audit function is management by an external

      service provider, whose services has been terminated and this function now resides in the office

      of the CEO.

     Skills and competencies of the Samaf staff – the initial staffing of the agency was people who

      had good social skills but lacked the necessary financial and developmental skills. Samaf is in

      the process of implementing Project Bokomoto to improve the competencies of staff.

     Lack of support to institutions in the poorer provinces – Some of the institutions might be in a

      particular province, they had distribution channels in the other provinces e.g. Marang, which is

      based in Gauteng is also present in 6 other provinces.

     Committee’s view on the presentation document – The committee felt that the report had to

      interpretable, supported by reliable evidence, that there should be no incongruent information,
16 NOVEMBER 2010                                                 Page: 179 of 264


         and that Samaf must go back and rework the document, where a follow-up meeting will be

         scheduled.



9.   Findings of the Committee



        Public awareness of the mechanisms implemented, as agreed to in the “Framework agreement”

         remains a concern.

        Many companies and businesses are unaware of the existence of the Training labour lay-off

         scheme and the funding to companies in distress provided for by the IDC.

        While conducting its oversight visits the committee noted that there was little or no

         coordination between the funding to companies in distress (as provided by the IDC) and the

         labour lay-off scheme.

        Members of the public (especially the poorer provinces) are unaware of the existence of Khula

         and Samaf as development finance institutions.

        There is a lack of monitoring and evaluation by the IDC, Khula and Samaf to

         institutions/companies it provided funding to.

        Capacity building initiatives by Samaf and Khula will be imperative for the sustainability and

         viability of SMMEs.

        The Competition Commission still relies to heavily on applications received by the public and

         other stakeholders to investigate issues of possible collusion.

        The Competition Commission lacks the necessary capacity to perform its mandate optimally.

        Members of the public are unaware of the work and outcomes of cases by the Competition

         Commission.

        Cooperation and coordination between the Competition Commission and the Competition

         Tribunal and other stakeholders will be critical if the Commission is to work efficiently.
16 NOVEMBER 2010                                               Page: 180 of 264


     The cumbersome process of applying for funding from the DFIs, remains an obstacle for

      funding to broader communities.

     The public lacks the necessary information relating to the activities of the Competition

      Commission and the International Trade Administration Commission of SA (ITAC).

     Tender-rigging remains a challenge.

     There are signs that provinces are endeavouring to align their Provincial Growth and

      Development Strategies (PGDSs) with that of the national plans.

     There is a lack of coordination and cooperation between the Provincial Department of

      Economic Development and municipalities on the development of the Provincial Growth and

      Development Strategies (PGDSs) and the Local Economic Development plans (LEDs),

      respectively.

     The establishment and creation of viable cooperatives will be fundamental in eradicating

      poverty and creating jobs.

     Khula’s impact will be greater once Khula Direct is implemented.

     The recapitalisation of Khula Direct will be critical.

     Coordination and cooperation between the different DFIs is imperative for poverty alleviation.

     The presence and existence of Khula and Samaf in the local areas is vital for economic

      development.

     Khula Direct will be implemented initially as a pilot.

     The EDD is experiencing challenges with regard to the roll-out of their official website.

     It takes the EDD 3-4 months to fill a position. The committee is of the view that this period is

      too long.

     The financial performance of the department (for the 1st and 2nd quarter) is a concern to the

      committee.
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      The Green Economy is a sector which will provide jobs to the poorest of the poor, e.g. waste

       recycling.

      The EDD is working with the National Treasury on the revision of the Preferential

       Procurement Policy Framework Act.

      EDD will underspend this financial year.

      EDD will lead policy issues on e.g. the Green Economy and the Second Economy.

      A media statement was made on Tuesday, 26 October 2010 on the Framework for the New

       Growth Path.

      Information between the EDD and IDC are skewed. Members are concerned that there might

       be a communication gap between the two as information between them does not correlate.

      Working relations with the MECs and Provincial Departments of Economic Development is

       unfolding very positively.

      With regard to agricultural and rural development, the EDD is working closely with the

       Department of Rural Development, where many jobs to be created in this sector will be in the

       second economy, according to the EDD.

      The committee commended the EDD for not utilizing consultants on a large scale.

      The EDD has developed a dashboard of indicators for measuring the performance of entities.

      Initial research was undertaken by the EDD on a Cooperatives strategy, where engagements

       were held with National Treasury and further consultations with the DTI and the International

       Labour Organisation (ILO).

      A MOU was drafted with an academic institution to develop a policy and monitoring tool

       relating to the Cooperatives strategy.



10. Conclusion
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The Committee is mindful that the department did not have Strategic Plan and Budget Vote for the

period under review. The first Strategic Plan and Budget Vote of the newly established Department of

Economic were tabled in Parliament during March 2010.



The Committee is however satisfied with the progress and development to date regarding the work and

activities of the EDD during this period, taking into consideration the lack of human resources within

the department. The committee is of the view that the staffing of the department must be priority area

for the department.



The committee is concerned about underspending in the 1st and 2nd Quarterly Performance Reports,

due to the non-filling of vacancies, which resulted in some of the programmes not spending at all.

11. Recommendations of the Committee in respect of the Department


The Committee recommends the following to the Department:


With regard to the Green Economy


      The possible expansion of the Green Economy should not unnecessary impact negatively on

       jobs in the sectors of the economy that can be categorised as carbon intensive.


      Focus should not only be on the impact by individuals and households, but on big industry that

       have a major impact on the carbon emissions.


      A major focus of the Green Economy should be towards development and job creation whilst

       preserving the economy.


      The role of Research and Development (R&D) should be to develop technology that will

       enable/gear towards accelerated economic growth, employment creation and development of

       our people especially the working class and the poor.
16 NOVEMBER 2010                                               Page: 183 of 264


      Emphasis should be placed on incentivised usage of green products and services


Lack of information


      There is a necessity for the Economic Development Department (EDD) and the entities to

       ensure that information flows to the various levels of society and stakeholders.


      The advocacy campaign of the IDC, relating to its funding to companies in distress should be

       strengthened and reinforced in all provinces.


      There is a necessity for Khula and Samaf to be located in all areas, especially rural areas.


Capacity building


      The Department and its entities should fill vacancies as a matter of urgency in order to fulfil

       their mandate as required.


      The recruitment processes (3-4 months) of the department are too time consuming, and should

       be reduced to be able to meet indicative timeframes.


Coordination and Cooperation


      The department must ensure that coordination and cooperation among the three spheres of

       government to be prioritised relating to the alignment of the national plans with that of the

       Provincial Growth and Development Strategies (PGDSs) and the Local Economic

       Development plans (LEDs).


      The department should ensure the integration of its programmes is prioritised.


      Better coordination and cooperation must be fostered among all the entities of EDD.
16 NOVEMBER 2010                                               Page: 184 of 264


      The department should ensure that interdepartmental cooperation and coordination is

       addressed, as this will be critical relating to the achievement of the Competition Commission’s

       mandate.


      The department should ensure that the activities performed by the DFIs are duplicated, in other

       words activities must be streamlined on their specific areas of focus.


Finance


      The department should ensure that appropriate measures are put in place to ensure that there is

       no underspending by the end of financial year 2010/11.


      Development Finance Institutions should allocate more funds to focus on the establishment of

       cooperatives in the various provinces.


      The department, in conjunction with the IDC should examine lowering the cost of funding,

       specifically the interest rates charged to companies.


      The department should ensure that programmes, as set out in its Strategic Plan, be adequately

       funded.


      The department should assist and guide Khula with regard to the recapitalisation of the Khula

       Direct model.


      The department should ensure that transfers to entities are fully spent towards its allocated

       purpose.


      Development Finance Institutions should ensure that the disbursement of funds is biased

       towards the poorer provinces in order to ensure equity in the distribution thereof (balance

       should be struck between the richer and poorer provinces).
16 NOVEMBER 2010                                                 Page: 185 of 264


General


          Those companies funded should be monitored and assisted with mentoring and coaching

           programmes.


          The dashboard of indicators developed by the EDD should be simplified.


          DFIs should relax the bureaucratic processes associated with funding application criteria in

           order to enable broader access.


          The EDD with the DTI, through the IDC, should address the high steel prices.


          The EDD should assist in ensuring that the IDC remain within its primary mandate, i.e.

           industrial development with a major focus on rural and urban areas.




Report to be considered.



                                       TUESDAY, 16 NOVEMBER 2010



ANNOUNCEMENTS



National Assembly and National Council of Provinces



The Speaker and the Chairperson



1.       Bills passed by Houses – to be submitted to President for assent



         (1) Bills passed by National Council of Provinces on 16 November 2010:
16 NOVEMBER 2010                                            Page: 186 of 264




            (a) Geoscience Amendment Bill [B 12B – 2010] (National Assembly – sec 75).



            (b) Division of Revenue Amendment Bill [B 35 – 2010] (National Assembly – sec 76).



National Assembly



The Speaker

1.   Referral of Bill to Committee



      (a)     The Adjustments Appropriation Bill [B34-2010] is hereby referred to the Standing

              Committee on Appropriations in terms of section 12(19) of the Money Bills

              Amendment Procedure and Related Matters Act, 2009 (Act No 9 of 2009).



2.   Membership of Committees



      The following changes have been made to the membership of Committees:



      National Assembly Rules Committee



      Discharged: Chohan, F I

      Appointed: Malale, M I



      Discharged: Martins, B A D

      Appointed: Mdakane, M R
16 NOVEMBER 2010                                              Page: 187 of 264




       Discharged: Sotyu, M M

       Appointed: Sibhida, N N



       Discharged: Thabethe, E

       Appointed: September, C C



       Discharged: Thomson, B

       Appointed: Gaum, A H



TABLINGS



National Assembly and National Council of Provinces



1.   The Speaker and the Chairperson



     (a)   Draft notice and schedule determining the rate, with effect from 1 April 2010, at which

           salaries, allowances and benefits are payable to Constitutional Court Judges and Judges

           annually, for approval by Parliament in terms of section 2(4) of the Judges’ Remuneration

           and Conditions of Employment Act, 2001 (Act No 47 of 2001).



     (b)   Draft notice and schedule determining the rate, with effect from 1 April 2010, at which

           salaries, allowances and benefits are payable to magistrates annually, for approval by

           Parliament in terms of section 12(3) of the Magistrates Act, 1993 (Act No 90 of 1993).
16 NOVEMBER 2010                                              Page: 188 of 264


           Referred to the Portfolio Committee on Justice and Constitutional Development and the

           Select Committee on Security and Constitutional Development for consideration and

           report.



2.   The Minister of Justice and Constitutional Development



     (a)   Report and Financial Statements of the Council for Debt Collectors for 2009-2010,

           including the Report of the Independent Auditors on the Financial Statements and

           Performance Information for 2009-2010.



     (b)   Proclamation No R.54 published in Government Gazette No 33576 dated 17 September

           2010: Commencement in terms of the Reform of Customary Law of Succession and

           Regulation of Related Matters Act, 2009 (Act No 11 of 2009).



     (c)   Proclamation No R.57 published in Government Gazette No 33605 dated 1 October 2010:

           Commencement in terms of the Criminal Procedure Amendment Act, 2008 (Act No 65 of

           2008).



     (d)   Government Notice No R.868 published in Government Gazette No 33605 dated 1 October

           2010: Designation of correctional facilities in terms of the Criminal Procedure Act, 1977

           (Act No 51of 1977).



     (e)   General Notice No 800 published in Government Gazette No 33459 dated 18 August 2010:

           Notice in terms of section 23 (1) and (2) in terms of the Counterfeit Goods Act, 1997 (Act

           No 37 of 1997).
16 NOVEMBER 2010                                            Page: 189 of 264




     (f)   Proclamation No R.45 published in Government Gazette No 33550 dated 10 September

           2010: Commencement of sections 10, 13, 14, 15 and 16 of the Act in terms of the Judicial

           Matters Amendment Act, 2008 (Act No 66 of 2008).



3.   The Minister of Finance

     (a)   Report and Financial Statements of the Government Employees Pension Fund for 2009-

           2010, including the Report of the Independent Auditors on the Financial Statements and

           Performance Information for 2009-2010.



National Assembly



1.    The Speaker



     (a)   Public Protector Report No 22 of 2010-11 on an investigation into complaints relating to

           misconduct and maladministration in connection with the affairs of the Commission for

           Gender Equality.



           Referred to the Ad Hoc Committee on the Commission for Gender Equality Forensic

           Investigation for consideration and report.



COMMITTEE REPORTS



National Assembly
16 NOVEMBER 2010                                              Page: 190 of 264


COMMITTEE REPORTS



National Assembly



1. Report of the Standing Committee on Finance on the 2010 Medium Term Budget Policy

   Statement, dated 16 November 2010

The Standing Committee on Finance, having considered the 2010 Medium Term Budget Policy

Statement, reports as follows:



1. Introduction and Background



The Minister of Finance (the Minister) tabled the 2010 Medium Term Budget Policy Statement

(MTBPS) before Parliament on 27 October 2010. In tabling the MTBPS, the Minister met his

obligation under section 28 of the Public Finance Management Act 1 of 1999 (PFMA) that requires the

Minister to table multi-year budget projections for revenue, expenditure and key macro-economic

projections on an annual basis. In addition to that, the Minister also met his obligation under section

6(1) of the Money Bills Amendment Procedure and Related Matters Act 9 of 2009 (henceforth referred

to as the Money Bills Act) that requires the Minister to submit to Parliament the MTBPS.



According to section 6(5) of the Money Bills Act, the Standing Committee on Finance and Select

Committee on Finance (the Committees) must 30 days after the tabling of MTBPS report to the

National Assembly (NA) and the National Council of Provinces (NCOP), respectively, on the

proposed fiscal framework for the next three financial years. In line with section 6(2), the Committees

report on a revised fiscal framework for the 2010/2011 financial year and the proposed fiscal
16 NOVEMBER 2010                                              Page: 191 of 264


framework for the following three years; and an explanation of the macro-economic and fiscal policy

position, the macroeconomic projections and the assumptions underpinning the fiscal framework.



Following the tabling of the 2010 MTBPS and the engagement with the Minister, the Committees held

hearings on 10 and 11 November 2010, receiving submissions from a panel of economists, organised

labour and organised business. This report reflects the main themes emerging from the engagement

with the Minister, economists, organised labour and organised business. This report includes two main

sections, namely: Economic Outlook and Policy, and Fiscal Trends and Policy. The former section

gives an overview of economic outlook and policy with specific reference to key macro-economic

indicators within the context of the current global economic environment. The latter section provides

details of fiscal policy over the Medium Term Expenditure Framework (MTEF) with specific

reference to the fiscal stance adopted by government.



2. The 2010 Medium Term Budget Policy Statement

Basically, the 2010 MTBPS provides an account of current trends in the economy, the medium-term

outlook, overview of macroeconomic and fiscal considerations, and a summary of government’s

spending plans for the period ahead. The MTBPS therefore sets out Government’s spending plans for

the next three fiscal years, based on certain macroeconomic assumptions. In doing so, there is usually a

wide range of aspects to be taken into account. The 2010 MTBPS covered six broad themes, namely:

economic assumptions, fiscal framework, spending priorities, division of revenue, changes to

conditional grants and the mid-term report on spending.

3. Job Creation and Economic Growth



In order to meet the developmental needs of South Africa a new economic growth path needs to be

developed in consultation with all social partners across several frontiers; which includes education,
16 NOVEMBER 2010                                              Page: 192 of 264


skills development, national health insurance, land and agrarian reform, residential settlements and

urban renewal, environment management, infrastructure investment and maintenance, enterprise

development, and public sector service delivery. However, before the implementation, there will be a

need for some ground work to be done in the public sector and private sector in terms of coordinating

public policy and market regulations. The 2010 MTBPS indicated the need to raise the economy onto

a more labour intensive method to create jobs across the board. The economic growth does not assist

the economy when there are less job opportunities being created. This means that the policy debate

goes beyond the macroeconomic and financial challenges to include the social component.



The 2010 MTBPS outlines the macroeconomic, fiscal and public expenditure dimensions of the

proposed development path. It emphasised the need for the increase on infrastructure investment

spending for faster growth and to reduce the budget deficit over the next period. The discipline in

financial management in the public sector and improved education, health, and other infrastructure

programmes is crucial. There is a need for the following factors to be agreed upon by government and

its social partners:



   Strengthening labour market institutions should include improved and expanded further education

    and training opportunities, placement services and to increase the demand for labour;

   An integrated approach in financing some of the economic infrastructure investment such as

    development enterprise, housing and farming support;

   The enhanced industrial policy action plan which incorporates industrial development and

    promotion, support for small businesses and other local opportunities;

   More competition is required for certain industries such as transport, communication and

    electricity;
16 NOVEMBER 2010                                              Page: 193 of 264


   The economic development of South Africa needs to be linked to the African continent for

    improved economic performance; and

   Improved service delivery is of great importance and this can only be possible through good

    financial management, control systems, good governance, proper budgeting and well managed

    contractors to deliver the agreed output or targets.



Crucial issues to be addressed during this MTEF period include how to increase job-creating growth.

Other issues are promoting appropriate budget balance and to deal with capital flows and the resultant

appreciation of the rand.



The 2010 MTBPS re-affirms the important role of the private sector in growth and employment

creation. While social grants provide an important safety net for about a quarter of the population,

South Africa’s long-term prosperity depends on more people being drawn into work. The private

sector accounts for 75 per cent of all economic activity and a slightly higher share of employment, and

will remain the primary driver for job creation. The public sector plays a complementary role in this

process. Alongside a range of initiatives to increase training and skills development, specific

government interventions to raise employment include an expanded public works program and a youth

job imitative.



4. Macroeconomic Forecast



National Treasury reports that gross domestic product (GDP) growth is expected to moderate in the

second half of the 2010/11 financial year. The 2010 MTBPS indicates that, although the economy has

gained strength since the budget was tabled at the beginning of the 2010/11 financial year, the growth

outlook has so far improved. This is evident from the new projected economic growth, which is
16 NOVEMBER 2010                                                 Page: 194 of 264


expected to be between 3 to 3.5 per cent in the 2011 calendar year. The recovery in revenue and

moderate growth in public spending is expected to decrease the fiscal deficit. For example, the

estimated deficit of 5.3 per cent of GDP projected for the 2010/11 financial year is projected to decline

to 3 per cent in the 2013/14 financial year. The 2010 MTBPS also projects that government debt will

stabilise to 40 per cent of GDP by the 2015 calendar year. It was also noted that expenditure has

increased by R67 billion relative to the baseline over the Medium Term Expenditure Framework

(MTEF). This increase in expenditure has been informed by the 12 outcome policy priorities which

include education, health, infrastructure, and job creation.



Inflation is expected to remain below 6 per cent over the Medium Term Expenditure Framework

(MTEF) while private investment and employment recover gradually. Business Unity South Africa

(BUSA) agrees that inflation forecasts with headline Consumer Price Index (CPI) inflation is expected

to remain below 6 per cent over the next three years are realistic, but indicated that it remains essential

to successfully anchor inflationary expectations. According to BUSA, lower inflation presents an

opportunity for the use of monetary policy to further support economic activity. According to BUSA,

growth prospects are expected to be driven by household consumption and gross fixed capital

formation and will undoubtedly be assisted by lower inflation.



The 2010 MTBPS indicates that sustained exchange rate appreciation will lead to unbalanced growth,

widening the current account deficit and increasing the economy’s vulnerability to shocks. Table 1

(below) summarises the key macroeconomic projections inclusive of 2007 and 2013 calendar years.



Table 1: Macroeconomic Projections 2007 - 2013

   Calendar Year              2007          2008       2010          2011          2012

                                     2009             Estimat               2013
16 NOVEMBER 2010                                                 Page: 195 of 264


                                    Actual             e                  Forecast

   Percentage change unless otherwise indicated

   Final       household      5.5       2.4   -3.1         2.6      3.4      4.1     4.5

   consumption

   Final     government       4.7       4.9    4.7         4.9      4.3      4.2     3.7

   consumption

   Gross fixed capital      14.2       11.7    2.3         0.8      5.6      5.0     5.9

   formation

   Gross        domestic      6.4       3.3   -1.8         4.1      4.2      4.5     4.9

   expenditure

   Exports                    5.9       2.4 -19.5          4.1      5.7      6.6     7.6

   Imports                    9.0       1.4 -17.4          8.4      7.8      7.9     8.7

   Real GDP growth            5.5       3.7   -1.8         3.0      3.5      4.1     4.4

   GDP inflation              8.2       9.2    7.3         6.1      5.3      5.5     5.6

   GDP at current          2,017.    2,283.   2,40   2,631.4     2,867.     3,14 3,471.9

   prices                      1         8     7.7                   1       8.0

   (R billion)

   Headline         CPI       6.1       9.9    7.1         4.4      4.7      5.0     5.2

   inflation

   Current       account     -7.2      -7.1   -4.0      -4.2       -4.9     -5.3     -5.8

   balance       (% of

   GDP)

Source: National Treasury (2010)



4.1 Economic Policy and Outlook
16 NOVEMBER 2010                                                Page: 196 of 264




South Africa experienced a decline in gross domestic product of 1.8 per cent in 2009, and a loss of

employment estimated close to a million jobs. This was a severe deterioration, despite a continued

expansion in government infrastructure spending and the countercyclical monetary and fiscal policy

response.



Higher commodity prices have contributed to a somewhat more buoyant recovery in the 2010 calendar

year than was anticipated at the beginning of the 2010 calendar year during the National Budget in

February 2010. Households have started to spend again as interest rates declined together with lower

inflation.

According to the Federation of Trade Unions of South Africa (FEDUSA), the 2010 MTBPS had to

address a wide range of factors, ranging from the need to re-balance the economy after the deep

recession, global developments and the need to make some inroads to mass unemployment and

poverty. FEDUSA points out that, to this list, the urgent need to improve service delivery and to

eradicate corruption and fraud must be added.


4.2 The New Growth Path

The budget policy framework is informed by requirements of a new growth path, in which six key

sectors and activities have been identified for unlocking employment potential:



       Infrastructure, through the expansion of transport, energy, water,

        communications and housing;

       Agriculture and the agro-processing sector;

       Mining and mineral beneficiation;

       The green economy and associated manufacturing and services;
16 NOVEMBER 2010                                               Page: 197 of 264


      Manufacturing sectors identified in the industrial policy action plan; and

      Tourism and selected services sectors.



The Minister of Finance highlighted that the new growth path provides the basis for coordinated

policies and programmes across the state, and reinvigorated dialogue and cooperation among social

partners.

According to the Minister of Finance, South Africa needs to promote more rapid job creation through a

broad range of policy initiatives to achieve the country’s developmental aims. These include the

following:

   

      Labour-market institutions must be strengthened, including expanded further education and

       training and specific interventions are needed to increase both public and private sector demand

       for labour, especially for young work seekers;

      A greater participation of development finance institutions in co-financing infrastructure

       projects, enterprise development, housing and farming support;

      Industrial policy action plans have to be implemented, together with increased support for

       small enterprises and local economic development;

      Greater investment and competition are needed in the electricity, transport and communications

       sectors;

      Improved economic cooperation between countries in Southern Africa, including financial and

       trade institutions, transport, communications, energy and water networks; and

      The underlying all of the above, improvements in public service delivery will depend on better

       financial management, good governance and disciplined pursuit of agreed service delivery

       outputs and targets.
16 NOVEMBER 2010                                               Page: 198 of 264


BUSA believes that the 2010 MTBPS provided important guidance on macroeconomic policy

direction. BUSA welcomes the signals that the new growth path will be aligned to the existing

framework and vice versa. Furthermore, BUSA believes that greater attention must be given to address

underlying competitiveness issues and that reducing the cost of doing business is supportive of the

new growth path, which is probably the least expensive approach to unlocking South Africa’s long

term growth potential.

The Chief Economist at the Efficient Financial Holdings, Mr Dawie Roodt, points out that despite a

rather healthy fiscal stance, significant changes in certain variables can be expected over the next few

years. The new growth path will require huge amounts of money and, although the fiscal deficit is

likely to remain within acceptable levels, huge expenditure requirements by the parastatals will add

significantly to the state debt burden. Expenditure by parastatals is under the line, items which are not

included in the deficit, but which are included in state debt. The 2010 MTBPS expects state debt

relative to GDP to top 40 per cent by 2014, significantly higher than now but a lot lower than that of

many other economies.



FEDUSA indicates that South Africa’s present economic growth trajectory cannot meet the country’s

employment needs. Faster growth is required over an extended period of time to significantly increase

labour absorption, reduce high unemployment and achieve a more equitable distribution of income.

FEDUSA welcomes the attention given to the serious socio-economic problem of unemployment

through the proposed new growth path. According to FEDUSA, previous programs such as the

Reconstruction and Development Programme (RDP), Growth Employment and Redistribution

(GEAR) and Accelerated and Shared Growth Initiative of South Africa (ASGISA) had this as their

primary goal. The current strategies and programs contained in the budget already contain elements of

the proposed new growth path.
16 NOVEMBER 2010                                                Page: 199 of 264


The National Union of Mineworkers of South Africa (NUMSA) supports the call for a new growth

path that will place employment at the centre of government’s economic policy. The People’s Budget

Coalition (PBC) points out that the new growth path must be supported by policies that create and

retain decent work, together with the eradication of poverty and inequality.



The Institute for Democracy in South Africa (IDASA) is of the view that the 2010 MTBPS does not

contain much more detail on the so-called new growth path intended to create five million jobs over

the next ten years, thus reducing the unemployment rate from approximately 25 per cent to

approximately 15 per cent by 2014.



5. Fiscal Policy



Fiscal policy guides government’s decisions about revenue, spending and borrowing. South Africa’s

fiscal policy enables government to deliver on its developmental mandate by providing resources in a

manner that is sustainable and that reinforces the stability of the economy.



National Treasury reported that the consolidated government deficit is projected to recover from 6.3

per cent of GDP in the 2010/11 financial year to 3.2 per cent by the 2013/14 financial year. The

recovery will be driven by the strong uptake in revenue and the stabilisation in non-interest spending.

Growth in expenditure will need to moderate as debt service costs increase over the MTEF. The

counter-cyclical fiscal policy will aim to grow revenues while gradually reducing non-interest stimulus

spending. It is important to keep the fiscal trajectory on a sustainable path while meeting growth

expectations.
16 NOVEMBER 2010                                                  Page: 200 of 264


Table 2 (below) summarises the consolidated government fiscal framework inclusive of 2007/08-

2013/14 financial years.



Table 2: Consolidated government fiscal framework 2007/08 – 2013/14

                 2007/08     2008/09     2009/10     2010/11      2011/12   2012/13   2013/14

  R Billion        Outcome                           Estimate        Medium-term estimates

                 Preliminary

  Revenue        625.7       684.8       666.9       761.0        843.0     931.7     1,040.2

  Percentage     30.1%       29.5%       27.2%       28.4%        28.7%     28.9%     29.1%

  of GDP

  Expenditu      591.3       711.7       832.5       904.1        977.2     1,059.1   1,154.2

  re             28.4%       30.7%       33.9%       33.7%        33.3%     32.8%     32.3%

  Percentage

  of GDP

  Budget         34.4        -26.8       -165.6      -143.1       -134.2    -127.4    -114.0

  balance        1.7%        -1.2%       -6.7%       -5.3%        -4.6%     -3.9%     -3.2%

  Percentage

  of GDP

Source: National Treasury (2010)



The Minister of Finance indicates that, as the world economy recovers from the global crisis, there is

considerable debate about how quickly governments should be closing their budget deficits. It is

argued that the recovery will be held back if governments cut expenditure too quickly, while others

point to the potentially devastating effects of fiscal default.
16 NOVEMBER 2010                                               Page: 201 of 264


FEDUSA commends government on its fiscal stance during and after the recession. South Africa’s

counter-cyclical policy is designed to steady the economy and to protect core social and economic

programs from undue volatility. Before the recession, government saved revenue and had a small

balance surplus. During the recession, government ran a deficit so to maintain its spending. In this

way, government moderated the impact of the business cycle and raised long-term growth.



FEDUSA further points out that as the economy’s growth rate increases, the rate of growth in

government spending will have to be reduced. While the higher fiscal deficit was the appropriate

counter-cyclical response during the downturn, government will have to reduce the level of borrowing

in the years ahead. As the economy recovers, government will tighten its stance to avoid pushing up

interest rates and crowding out private-sector investment. It also follows that during the 2010 MTBPS

period, monetary policy will bear the brunt in efforts to maintain inflation within the target range of 3

to 6 per cent.



BUSA welcomes the announcement that the budget deficit is expected to be narrowed to

approximately 3 per cent of GDP by the 2013/14 financial year, and stabilisation of government debt

at about 40 per cent of GDP in the 2015/16 financial year. BUSA believes that the 2010 MTBPS has

broadly struck the right balance between fiscal consolidation and being growth-friendly.



IDASA is of the view that the 2010 MTBPS as presented is fairly conservative and that the South

African budget policy in response to the recession consists broadly of maintaining pre-recession public

expenditure commitments in the face of likely declining tax revenue. According to IDASA, it is

necessary that the budget deficit and consequent borrowing requirements are permitted to increase. In

other words, budget policy is becoming fairly counter-cyclical through the use of automatic stabiliser

of tax revenue fluctuation.
16 NOVEMBER 2010                                                  Page: 202 of 264




The PBC indicates that the budget deficit is projected to narrow, as National Treasury moderates

government spending in order to stabilize public debt at approximately 40 per cent by the 2015/16

financial year. This will not assist in speeding the recovery and stemming the tide of job losses. The

budget deficit is projected to be 3.2 per cent by the 2013/14 financial year. The structural budget

deficit, which takes out cyclical effects, is projected to be 3 per cent.

6. Capital Flows and Exchange Rate Management



The 2010 MTBPS indicates that the net capital inflows to South Africa have risen strongly over the

last two years, reaching 5.5 per cent of GDP in the first half of 2010 compared with 4.7 per cent in

2009 as a whole.



As contained in the 2010 MTBPS, the rand has appreciated by 7.5 per cent against the United States

(US) dollar since December 2009, and by 6.1 per cent against a trade-weighted basket of currencies.

Because South Africa has higher inflation than its major trading partners, the real effective rand

exchange rate, which reflects losses or gains in competitiveness, is now approximately 12 per cent

above its average level for the past decade.



National Treasury reported that due to international factors, capital flows were driven to emerging

markets causing the rand to strengthen. The real exchange rate is 12 per cent above its 10 year average.

Chile has a similar degree of overvaluation, but Brazil on the other hand is much more stretched.



National Treasury and the South African Reserve Bank (SARB) will continue to purchase foreign

exchange reserves. SARB will sterilise inflows associated with foreign direct investment inflows using

foreign exchange swaps. These include:
16 NOVEMBER 2010                                               Page: 203 of 264




   •   Exchange control and offshore investment limits on individuals amended;

   •   To make SA attractive as a corporate investment destination and encourage investment in the

       rest of the African continent;

   •   Exchange controls on domestic companies will be reformed to remove barriers to their

       international expansion from a domestic base; and

   •   Prudential framework for foreign investment by private and public pension funds, including the

       Government Employees Pension Fund (GEPF).



BUSA reported that they support the commitment to a flexible exchange rate management regime and

believes that ‘leaning against the wind’ is the least costly option in dealing with the volatility of the

rand. This approach, combined with reserve accumulation and exchange control reform can further

alleviate the pressures on the rand.



6.1 Potential Favourable Implications of Exchange Rate Management



According to the Chief Economist at the Industrial Development Corporation, Mr Lumkile Mondi,

potential favourables to exchange rate management includes the increase in price competitiveness of

exports, at least temporarily (bearing in mind the progressive erosion of such competitiveness

depending on inflationary impact). This could lead to increased export market penetration, assuming

there is appropriate demand. If price competitiveness and stability are sustained, it could lead to

progressive recapturing of foreign markets and securing new external customer bases.



Local market could be regained if price competitiveness and stability is sustained. Exchange rate

management could provide positive implications for the bottom line of commodity exporters whose
16 NOVEMBER 2010                                                 Page: 204 of 264


external sales are denominated in foreign currencies, while operational costs are rand-based. Foreign

tourism earnings could be increased as a weaker rand raises South Africa’s attractiveness. Mr Lumkile

Mondi pointed out that these factors could increase local production, employment gains, higher

investment propensity and job gains.



Mr Lumkile Mondi further indicates that exchange rate management could contribute to higher

dividend receipts (in rand terms) from South African investments abroad and potentially enhances the

wealth effect for South African holders of offshore assets. Positive fiscal implications include

potentially higher tax revenues due to increased economic activity, improved corporate returns and

higher household incomes through employment gains. Implications of the Balance of Payments may

be positive if export demand recovers substantially and significant import substitution is realised.



6.2 Potential Unfavourable Implications of Exchange Rate Management



As indicated by Mr Lumkile Mondi, exchange rate management creates uncertainty over potential

impact of intervention in terms of desired outcomes and their sustainability. The cost of interventions

is dependent on the choice of instruments, while an abrupt unwinding of substantial speculative

positions could have a destabilising effect, at least in the short-term, but effects could be long-lasting if

investors’ perceptions are unfavourable.



Considering South Africa’s low savings propensity and its dependency on foreign capital inflows to

finance its current account deficit and funding requirements, negative perceptions may have serious

adverse repercussions. The timing of interventions is critical in order to minimise unintended

consequences, for example, a negative impact on the cost of investment-related imports, while exports

may not recover sufficiently due to weak global demand.
16 NOVEMBER 2010                                                Page: 205 of 264




Exchange rate management could lead to a potential higher inflation environment (via imported

inflation, especially input costs such as fuel and food items), with negative implications for interest

rates, investment activity, employment, general cost of living and domestic consumption demand.

FEDUSA asserts that the increased capital inflows and resultant appreciation of the rand is partly a

result of a positive interest rate differential, but also a result of South Africa’s relatively favourable

fiscal position.



Although Government has opted for an exchange control relief as the main focus area, FEDUSA is of

the opinion that this leaves the option open for tax measures. In normal times, a tax on capital flows

may lead to less capital flows to South Africa. FEDUSA is therefore of the opinion that the exchange

control relief is the right option under the current circumstances. The PBC indicates that as emerging

market exchange rates appreciate, they suck in imports from advanced economies and struggle to

expand their export markets. The massive trade deficits that exchange rate appreciation will generate

for countries in the South Africa will constitute the basis for advanced economies to exit of the crisis.

The PBC is also of the view that financing long-term investment, using short-term capital inflows, will

create a massive imbalance in the national balance sheet, thus maturity mismatches will result, and

high interest rates will be required to keep these mismatches away from binding.



While BUSA supports the view that international cooperation is needed to achieve a more stable

international financial environment, the PBC argues that short-term capital inflows must be taxed

because they place the level of the exchange rate in a manner that is inconsistent with the requirements

of industrial development.
16 NOVEMBER 2010                                              Page: 206 of 264


Mr Lumkile Mondi advised Government not to interfere with the prevailing exchange rate

management policy as the cost of the intervention could be high and the desired outcomes of a

proposed intervention may not materialise as observed in Brazil and other emerging economies. Mr

Mondi suggested that the Government's long-term strategy should be to develop the infrastructure of

the entire Southern African region, both to improve access to regional resources and to develop a local

market to pick up slack left by the lack of growth in the US and Europe. Mr Mondi further cautioned

that instead of fighting the Rand's relative strength, South Africa should use the opportunity to import

the capital components necessary to underpin growth in the region, such as railway engines and

infrastructure components.




7. Tax Revenue and Policy



Budget revenue is the amount of revenue available to the fiscus to finance expenditure after taking into

account tax revenue, other revenue and transfers to other members of the Southern African Customs

Union (SACU). Tax revenue is the largest contributor to budget revenue. Tax revenue is highly

cyclical because taxes are levied on economic activity. This means that, if the economy is performing

well, more tax revenue will be collected and vice versa.



South Africa’s spending programmes have to be paid for. It is therefore reassuring to be able to note

that the improved economic performance has contributed to a projected increase of R31 billion in tax

revenue for the 2010/11 financial year, by comparison with an estimate during the 2010 National

Budget in February 2010.



Total tax revenue is expected to amount to R679 billion in the 2010/11 financial year (25.3 per cent of

GDP). A strong increase in value added tax (VAT) proceeds has been recorded, partly attributed to
16 NOVEMBER 2010                                               Page: 207 of 264


increased consumer demand, but also because of lower capital investment and the associated reduction

in VAT refunds. Customs duty collections have improved, mainly as a result of higher vehicle and

component imports. For the period ahead, tax revenue is expected to average about 26 per cent of GDP

that is still somewhat below the levels recorded before the recession.




IDASA indicated that, although tax revenue performed slightly better in the 2010/11 financial year

than anticipated and is set to continue doing so over the medium-term, the actual recovery of tax

revenue levels to pre-recession levels will take considerable time. The overruns of this fiscal year

largely reflect a highly cautious 2010 Budget, which did not make the mistake of assuming things

would turn out much better than they did.




8. Government Debt



According to the 2010 MTBPS, the fiscal stance targets a combination of revenue and expenditure that

will enable government to pay for existing programmes while reinforcing the sustainability of the

public finances over the following three years.



BUSA welcomes the announcement that the budget deficit is expected to be narrowed to

approximately 3 per cent of GDP by the 2013/14 financial year, and stabilisation of Government debt

at approximately 40 per cent of GDP in the 2015/16 financial year. BUSA believes that the 2010

MTBPS has broadly struck the right balance between fiscal consolidation and being growth-friendly.

However, the overall public-sector borrowing requirement needs to be managed carefully and that

huge borrowing programmes by both Eskom and Transnet do not jeopardise long term borrowing costs

for the country.
16 NOVEMBER 2010                                               Page: 208 of 264


It is noted in the 2010 MTBPS that real non-interest government expenditure per person has doubled

over the past eight years, which was made possible by buoyant growth and revenue, and the declining

share of debt service costs in GDP. Government spending on infrastructure and social assistance

continued to expand strongly during the economic downturn in 2008 and 2009 calendar years.

Expenditure growth will be slower over the period ahead, averaging real growth of approximately 3

per cent per year.



The main features can be summarised as follows:



      Higher GDP growth and reduced inflation;

      A recovery in tax revenue from 24.4 per cent of GDP in the 2009/10 financial year to 26.4 per

       cent of GDP by the 2013/14 financial year;

      A moderation in the real growth of non-interest expenditure and a reduction in the proportion

       of expenditure to GDP over the MTEF; and

      A rise in government debt-service costs from 7.5 per cent of expenditure in the 2010/11

       financial year to 9.6 per cent by the 2013/14 financial year.



Table 3 (below) provides a summary of total government debt inclusive of 2007/08 and 2013/14

financial years.



Table 3: Total government debt 2007/08 – 2013/14

  As     at    31    2007/08        2008/09      2010/11       2011/12           2012/13

  March                     2009/10             Estimate               2013/14

  R Billion                 Outcome                          Medium-term estimates

  Domestic
16 NOVEMBER 2010                                      Page: 209 of 264


 Debt                480.8   529.7   705.5   880.9   1 045.2      1       1

  Gross       loan    93.8   101.3   106.6   107.2    107.2    211.6   356.0

 debt                387.0   428.4   598.9   773.8    938.0    107.2   107.2

  Less:      Cash                                                 1       1

 balance                                                       104.4   248.8

  Net         loan

 debt

 Foreign

  Gross       loan    96.2    97.3    99.5    96.7    104.4    107.7   104.4

 debt                    -       -    25.2    45.3     56.5     51.5    37.8

  Less:      Cash     96.2    97.3    74.3    51.4     47.9     56.2    66.6

 balance

  Net         loan

 debt

 Total       gross   577.0   627.0   804.9   977.6   1 149.6      1       1

 loan debt           483.2   525.6   673.2   825.2    985.9    319.3   460.4

 Total net loan                                                   1       1

 debt                                                          160.6   315.4

 As percentage

 of GDP:              27.7    27.0    32.8    36.4     39.2     40.9    40.9

  Total      gross    23.2    22.6    27.4    30.7     33.6     36.0    36.9

 loan debt

  Total        net

 loan debt            16.7    15.5    12.4     9.9       9.1     8.2     7.2

 As percentage
16 NOVEMBER 2010                                                 Page: 210 of 264


  of total gross

  loan debt:

    Foreign

  gross        loan

  debt

Source: National Treasury (2010)



9. Key Issues



The following key issues have been identified from the 2010 MTBPS and submissions from organised

labour and organised business:



        Until recently, the constitutionally-required legislation setting out the procedure for Parliament

         to amend the budget has been enacted as the Money Bills Amendment procedure and Related

         Matters Act, 2009. To support it in it’s application of the Act, Parliament must be capacitated

         through the establishment of the Parliamentary Budget Office as mandated in this Act;

        Most commentators welcomed the emphasis in both the unveiling of the new growth path and

         the 2010 MTBPS on the importance of partnerships. However, some indicated that the 2010

         MTBPS did not contain much more detail on the new growth path which is intended to create

         five million jobs over the next ten years, thus reducing the unemployment rate from

         approximately 25 per cent to approximately 15 per cent by the 2014 calendar year. This is not

         surprising, given that the detail still needs to be worked out and other stakeholders be

         consulted.

        Fiscal and monetary measures are being taken in response to the present strength of the Rand.

         However, some commentators cautioned Government not to interfere with the prevailing
16 NOVEMBER 2010                                             Page: 211 of 264


       exchange rate management policy as the cost of the intervention could be high and the desired

       outcomes of a proposed intervention may not materialise.



10. Conclusion

In the context of the current economic and social challenges and that of a small open economy

integrated to the global marketplace, a commitment to a prudent macroeconomic framework is crucial.

Prudent fiscal management over years assisted South Africa to ride the tide of the deep recession. It

helped the country to continue with its expenditure plans and, in the process, to act in a counter-

cyclical way. However, fiscal policy alone cannot be expected to successfully address South Africa’s

challenges. Whilst macroeconomic policy can go a long way in creating a favourable macro-economic

environment, it is important that successful implementation of the micro-level programmes and

projects generate tangible outcomes.



The clarification of Government’s stance on certain key macroeconomic issues provides a degree of

certainty and predictability, and will further support both consumer and business confidence. The

details of the new growth path were not included in this year’s MTBPS, although many of the

proposed aspects are already part and parcel of the MTEF. The debates and consultations which will

generate greater detail on a new growth path will be an important opportunity to consider alternatives

and to secure broad ownership of a truly developmental framework.



The Committees and most commentators commended the Minister of Finance on a balanced approach

that was followed in the 2010 MTBPS.



11. Committee Recommendations
16 NOVEMBER 2010                                            Page: 212 of 264


Having considered the 2010 MTBPS and conducted hearings on the 2010 MTBPS, the Standing

Committee on Finance recommends that:



11.1 The Minister of Finance should provide details on how National Treasury will supplement the

proposed New Growth Path to Parliament. These details to form part of the 2011 National Budget in

February 2011.



11.2 The Minister of Finance considers providing details on how the State plans to design and fund

the much-needed universal health care system. This information may be included in the 2011 National

Budget in February 2011.



11.3 The Minister of Finance provides more and updated details on how South Africa is dealing with

an appreciating Rand. This information to be included in the 2011 National Budget in February 2011.



11.4 The Minister of Finance should provide the Committee with details on proposals to address

corruption in the public financial system.



11.5 The Minister of Finance should provide the Committee with a progress report on the proposed

wage subsidy as promised in March 2010.



11.6 The Minister of Finance should provide the Committee with further details on promoting small

businesses.



12. Oral Submissions
16 NOVEMBER 2010                                              Page: 213 of 264


Table 4 (below) contains a list of people who made oral and/or written submissions before the

Committees, some in their personal capacity.



       Table 9: List of Submissions’ People

      Name                      Position                      Organisation

      Mr. Pravin J. Gordhan     Minister of Finance           National Treasury

      Mr. Nhlanhla Nene         Deputy Minister of Finance National Treasury

      Mr. Lesetja. Kganyago     Director-General              National Treasury

      Mr Oupa Magashula         Commissioner                  SARS

      Mr. Kenneth Brown         Deputy Director-General:      National Treasury

                                Intergovernmental relations

      Mr. Andrew Donaldson Deputy          Director-General: National Treasury

                                Public Finances

      Mr Lumkile Mondi          Chief Economist               Industrial

                                                              Development

                                                              Corporation (IDC)

      Mr. Dawie Roodt           Chief Economist               Efficient Financial

                                                              Holdings

      Prof. Raymond Parsons     Deputy Chief Executive        BUSA

      Ms. Simi Siwisa           Director: Economic Policy     BUSA

      Mr.Coenraad               Parliamentary Officer         Business

      Bezuidenhout                                            Parliamentary

                                                              Office

      Ms.Prakashnee             Parliamentary Officer         COSATU

      Govender
16 NOVEMBER 2010                                         Page: 214 of 264


      Mr. Sidney Kgara        Parliamentary Officer       NEHAWU

      Mr. Woody Aroun         Parliamentary Officer       NUMSA

      Mr. Dennis George       General Secretary           FEDUSA

      Mr. Len Verwey          Budget Manager              IDASA



The written submissions by the above-mentioned organisations are available on request from the

Committee Secretariat.



13. References



BUSA, (2010), Medium Term Budget Policy Statement: Presentation to the portfolio Committee on

Finance, Cape Town, 10 November 2010.



COSATU, (2010), COSATU Expectations on the Medium Term Budget policy Statement, Cape

Town, dated 10 November, 2010.



George, D. (2010), Powerpoint presentation on FEDUSA 2010 Medium Term Budget Policy

Statement Comments. The Joint Portfolio Committee on Finance, dated 11 November 2010.



George, D. (2010), FEDUSA Submission on the 2010 Medium Term Budget Policy Statement, Cape

Town, 11 November 2010.



Gordhan, P. (2010), Medium Term Budget Policy Statement 2010’s Speech, Parliament of RSA, Cape

Town, 27 October 2010.
16 NOVEMBER 2010                                          Page: 215 of 264


IDASA, (2010), Perspectives on the 2010 MTBPS. A Presentation to the Finance Committees, Cape

Town, 11 November 2010.

Mondi, L. (2010), Impact of reforming exchange rate system on economic policy & broader policies:

Some thoughts. A presentation to the Standing Committee on Finance and Select Committee on

Finance, dated 10 November 2010.



National Treasury, (2010) Medium Term Budget Policy Statement, Pretoria: Government Printers.



National Treasury, (2010), Medium Term Budget Policy Statement: Presentation to Parliament, Cape

Town, 28 October 2010.



NUMSA, (2010), Submission to the Joint Meeting of the Standing Committee on Finance & Select

Committee on Finance, (National Assembly and National Council of Provinces): The Treasury and

SARB are failing to manage our economy to promote growth and development- we need much lower

interest rates and tighter exchange controls!



PBC, (2010), Submission of the Peoples Budget Coalition to the Standing Committee on Finance and

Select Committee on Finance on the Medium Term Budget Policy Statement, dated 10 November

2010.



Roodt, D. (2010), The new Keynesian world and the MTBPS. A Presentation to the Standing

Committee on Finance and Select Committee on Finance, dated 10 November 2010.
16 NOVEMBER 2010                                                Page: 216 of 264


Verwey, L.; T. Dlamini, S. Durham, J Sylvester, and M. Zamisa, (2010), The 2010 Medium-Term

Budget Policy Statement: Determining the limits of the possible: A closer look at the 2010 MTBPS.

PIMS Budget paper 8, Idasa.



Report to be considered.



2. Report of the Portfolio Committee on Justice and Constitutional Development on the provisional

     suspension from office of Magistrate FR Rambau, dated 16 November 2010:



     The Portfolio Committee on Justice and Constitutional Development, having considered the report

     on the lifting of the provisional suspension of Magistrate FR Rambau, a regional magistrate at

     Polokwane, pending the outcome of an investigation into his fitness to hold office as a magistrate,

     reports as follows:



1)      0n 8 February 2010, the Regional Court President of the Limpopo Province informed the

        Commission that Mr Rambau, a regional magistrate at Polokwane, had been arrested for

        corruption on 5 February 2010. Mr Rambau was arrested together with the prosecutor and an

        attorney. It is alleged that Mr Rambau, the prosecutor and the attorney arranged the outcome of

        a trial by pre-determining the sentence for financial reward.



2)      Mr Rambau and his co-accused appeared in the Musina District Court on 8 February 2010 on

        charges of corruption. The matter was set down for 11 to 13 October 2010.



3)      On 8 February 2010, the Ethics Division of the Magistrates Commission informed Mr Rambau

        in writing that the Commission was contemplating recommending that he be provisionally
16 NOVEMBER 2010                                                Page: 217 of 264


        suspended from office, pending the outcome of an investigation into his fitness to hold office.

        He was requested to show cause, in writing, why such a decision should not be taken.



4)      At its meeting held on 26 August 2010, the Commission, having considered Mr Rambau’s

        response, resolved to advise the Minster to provisionally suspend Mr Rambau from office in

        terms of section 13(3)(a) of the Act. The Commission is of the view that that the charges

        against Mr Rambau are of such a serious nature as to make it inappropriate for him to continue

        to perform the functions of a Magistrate while the allegations are being investigated. The

        Commission is of the view that the alleged conduct by MR Rambau s of such a serious nature

        that it would justify his removal from office if he were found guilty of the misconduct charges

        preferred against him.



5)      In light of the above, the Minster decided to provisionally suspend Mr Rambau from office

        pending the outcome of an investigation into his fitness to hold office of a Magistrate.



Recommendation



Having considered the report on the provisional suspension of Magistrate FR Rambau, the Committee

recommends that the National Assembly confirms the provisional suspension.



Report to be considered.



3. Report of the Portfolio Committee on Justice and Constitutional Development on the provisional

     suspension from office of Magistrate L Skrenya, dated 16 November 2010:
16 NOVEMBER 2010                                                   Page: 218 of 264


     The Portfolio Committee on Justice and Constitutional Development, having considered the report

     on the provisional suspension of Magistrate L Skrenya, a Magistrate at Cala, pending the outcome

     of an investigation into his fitness to hold office as a magistrate, reports as follows:

1)      Mr Skrenya is a Magistrate and Judicial Head at Cala. On 5 August 2009 the Director of Public

        Prosecutions: Transkei directed that Mr Skrenya be prosecuted on a charge of fraud.



2)      On 18 September 2009, Mr Skrenya appeared in the Cala District Court. The criminal case was

        postponed on various occasions and was remanded to 21 and 22 September 2010 for trial. The

        criminal charge flow from misrepresentations that Mr Skrenya made to his sub-cluster head,

        Mr Mthimkulu: On 24 April, Mr Skrenya claimed he used his private vehicle on an official trip

        from Cala to Dordrecht and submitted a claim for a transport allowance but, in fact, he used a

        government vehicle. He was, therefore, not entitled to submit any claim for travelling

        allowance.



3)      A preliminary investigation conducted into other complaints filed against Mr Skrenya found

        prima facie evidence that, on 12 May 2009, he irregularly refused to adhere to a request by the

        Prosecutor to withdraw a criminal charge against an accused before a plea was tendered, meru

        moto postponed the case to 30 June 2009 and ordered that the accused be kept in custody. This

        decision was later set aside by the High Court on special review. His conduct resulted in the

        Minster of Justice and Constitutional Development being sued for damages. It is further alleged

        that Mr Skrenya held a criminal court which was not properly constituted and the he postponed

        various criminal cases in chambers in the absence of the prosecutor.



4)      On 26 October 2009, the Commission informed Mr Skrenya that it was contemplating

        recommending that he be provisionally suspended from office pending the outcome of an
16 NOVEMBER 2010                                               Page: 219 of 264


       investigation into his fitness to hold office. He was requested to show cause why the decision

       should not be taken. In his response, he indicated that there was no need to provisionally

       suspend him as there was no possibility of him interfering with the criminal and misconduct

       investigations. He further indicated that he never at any stage had the intention to defraud the

       State of any money. He was of the view that the complaints were levelled against him because

       his sub-cluster head “is pregnant with hatred towards him”.



5)     On 26 August 2010, the Commission, having considered Mr Skrenya’s response, resolved to

       advise the Minister to provisionally suspend him from office in terms of section 13(3)(a) of the

       Act.



6)     The Commission is of the view that the alleged misconduct against Mr Skrenya is of such a

       serious nature as to make it inappropriate for him to perform the functions of a magistrate while

       the allegations are being investigated. It would be inappropriate for a judicial officer, appearing

       as an accused before a court of law on a charge of fraud to still sit on the Bench.



7)     The Committee expressed its dissatisfaction at the amount of time taken by the Commission to

       finalise the matter.



Recommendation



Having considered the Report on the provisional suspension of Magistrate L Skrenya, the Committee

recommends that the National Assembly confirm the provisional suspension.



Report to be considered.
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1) Report of the Portfolio Committee on Justice and Constitutional Development on the provisional

     suspension from office of Magistrate IWOM Morake, dated 16 November 2010:

     The Portfolio Committee on Justice and Constitutional Development, having considered the report

     on the lifting of the provisional suspension of Magistrate IWOM Morake, a Magistrate at

     Lichtenburg, pending the outcome of an investigation into his fitness to hold office as a magistrate,

     reports as follows:



1)       Mr Morake is a Magistrate and Judicial Head at Lichtenburg. Several complaints were lodged

         with the Magistrates Commission against Mr Morake. The allegations were as follows:

        Attorneys Ranamane Phungo Inc alleged that Mr Morake had personally called their client into

         his office and instructed her to vacate the property she was occupying. This instruction was

         given to her although there was no eviction application before the court; no eviction order had

         been made by the court; nor had she consented to vacate the property.

        The Provincial Head of the South African Police Detective Service, North West, requested that

         the Commission investigate a complaint made by one of its members against Mr Morake. The

         member was the Investigating Officer (IO) in a stock theft matter and had arrested a suspect in

         the case in Lichtenburg. The suspect was charged, appeared before the Lichtenburg

         Magistrate’s Court and the matter was remanded. The IO alleges that a week prior to the

         remand date he was contacted by Mr Morake and ordered to appear before him at his office. Mr

         Morake threatened to issue a warrant for his arrest if he failed to do so. The IO complied with

         the instruction and attended the meeting. The accused was also present at the meeting. Mr

         Morake asked the IO if he would assist the accused. The IO refused. He later stated that he

         found the conduct of Mr Morake unusual and threatening.
16 NOVEMBER 2010                                                 Page: 221 of 264


        A complaint was received from Legal and Tax Services (Pty) Ltd (a legal expense insurance

         company) through the Chief Magistrate of the North West Administrative Region. It is alleged

         that Legal and Tax Services had paid Mr Morake R950 to assist their client to secure a loan. Mr

         Morake failed to secure the loan. They requested that the payment be refunded.

        In another incident, it was alleged that Mr Morake contacted a businessman, Mr Shohag and

         ordered him to see Mr Morake at his office. Mr Shohag was threatened with arrest if he failed

         to attend the meeting. Mr Shohag initially ignored the instruction but was later visited by three

         police officers who informed him that his employee had a problem with him and he had to go

         and see Mr Morake about this issue. Subsequently Mr Shohag and his two partners went to see

         Mr Morake at his office as instructed. Mr Shohag’s employee was also present. Mr Morake

         forced Mr Shohag to sign an agreement that he (Mr Shohag) would conduct business with his

         employee. Mr Morake threatened Mr Shohag with deportation back to Bangladesh if he failed

         to follow the instructions. Mr Shohag later obtained an interdict against Mr Morake and

         reported the incident to the SAPS Organised Crime Unit.



2)       On 13 July 2007, Mr Morake appeared in the Lichtenburg District Court on three charges of

         theft. The matter was postponed to 18 October 2010 for judgment.



3)       Mr Morake became involved in a dispute involving the payment of arrears in respect of

         electricity in the amount of R 1 173. He order a woman involved in the matter to come to his

         office with her husband. The other party was also present during the meeting. Mr Morake

         insisted that the woman pay the outstanding amount to him personally rather than to the

         municipality. He threatened to lock her in jail if she did not comply with his instructions. A few

         days later she paid him the money on the understanding that he would pay the money to the

         other party in the dispute. Weeks later she was summoned to the Small Claims Court for
16 NOVEMBER 2010                                               Page: 222 of 264


       payment of the amount of R1 173. The other party had not received the money. When she

       followed up with Mr Morake he made various excuses and finally stated that somebody had

       taken the money from his office.



4)     On 10 February 2010, the Magistrates Commission informed Mr Morake in writing that the

       Commission was contemplating recommending that he be provisionally suspended from office

       pending the outcome of an investigation into his fitness to hold office. He was requested to

       show why the decision should not be taken.



5)     On 26 August 2010, the Commission, having considered Mr Morake’s response received on 25

       February 2010, resolved to advise the Minster to again provisionally suspend Mr Morake from

       office in terms of section 13(3)(a) of the Act. The Commission is of the view that the existing

       evidence against Mr Morake is of such a serious nature as to make it inappropriate for him to

       perform the functions of a magistrate while the allegations are being investigated. It would be

       inappropriate for a judicial officer, appearing as an accused before a court of law in charges of

       theft, emanating from complaints within the district he is serving, to sit on the Bench.



6)     The Commission holds the view that the existing evidence against Mr Morake is of such a

       serious nature that it would justify his removal from office should he be found guilty of the

       misconduct charges preferred against him.



Recommendation



Having considered the Report on the provisional suspension of Magistrate IWOM Morake, the

Committee recommends that the National Assembly confirm the provisional suspension.
16 NOVEMBER 2010                                               Page: 223 of 264




Report to be considered.



5. Report of the Portfolio Committee on Justice and Constitutional Development on the lifting of the

     provisional suspension from office of Magistrate MK Chauke, dated 16 November 2010:



     The Portfolio Committee on Justice and Constitutional Development, having considered the report

     on the uplifting of the provisional suspension of Magistrate MK Chauke, a Magistrate at Pretoria,

     reports as follows:



1)      Mr Chauke appeared before the Specialised Commercial Crime Court on a charge of theft of a

        number of containers from Vitamine Laboratories on 18 September 2004.



2)      On 8 November 2007, Mr Chauke, his wife and son were convicted of contravening section 37

        of the General Laws Amendment Act 62 of 1955. They were all sentenced to 12 months

        imprisonment, suspended for a period of 5 years on condition that they are not again convicted

        of contravening section 37 of the Act during the period of suspension.



3)      The Minister, on the advice of the Magistrates Commission, provisionally suspended Mr

        Chauke from office with effect from 5 February 2010. The suspension was recommended

        based on three charges of misconduct namely, the criminal conviction above; contravening the

        Regulations for Judicial Officers in the Lower Courts, 1994; and contravening the Code of

        Conduct for Magistrates. The suspension was confirmed by both Houses of Parliament on 1

        and 4 June 2010, respectively.
16 NOVEMBER 2010                                             Page: 224 of 264


4)   On 20 November 2007, Mr Chauke’s attorneys advised the Commission that they were

     instructed to appeal against his criminal conviction. The appeal was heard on 15 June 2010. Mr

     Chauke’s conviction and sentence were set aside. The Commission, after studying the

     judgement, decided not to proceed with the misconduct charge based on the criminal charge.



5)   The Commission proceeded with a misconduct inquiry in respect of the remaining two charges

     of misconduct. It was alleged that during the period October 2002 to July 2004, during and

     after official office hours, Mr Chauke retained and forwarded e-mails to other persons

     containing explicit pornographic material on and from a computer supplied to him by the

     Department of Justice and Constitutional Development for the exclusive use in the execution of

     his official duties as a magistrate. It was also alleged that he used the computer to access

     internet sites containing explicit pornographic or obscene material.



6)   After considering the evidence placed before him at the inquiry, the Presiding Officer found Mr

     Chauke guilty in respect of failing to act at all times in a manner which upholds and promotes

     the good name, dignity and esteem of the office of a magistrate and the administration of

     justice. He was acquitted on the other count in that it was duplication. The Presiding Officer

     postponed the imposition of a sanction for a period of 12 months on certain conditions in terms

     of regulation 26(17)(a) of the Regulations for Judicial Officers in the Lower Courts, 1994.



7)   Since the criminal conviction of theft, which formed the basis of Mr Chauke’s provisional

     suspension, has been set aside by the High Court, Mr Chauke’s further provisional suspension

     is not justified. The nature and seriousness of the charge of misconduct on which he was found

     guilty does not warrant his provisional suspension either, and the sentence imposed does not

     impact on his fitness to hold office.
16 NOVEMBER 2010                                               Page: 225 of 264




8)      As the basis for Mr Chauke’s provisional suspension fell away, there is no reason to uphold his

        provisional suspension.



Recommendation



Having considered the report on the lifting of the provisional suspension of Magistrate MK Chauke,

the Committee recommends that the National Assembly confirms the lifting of the provisional

suspension.



Report to be considered.



6. Report of the Portfolio Committee on Justice and Constitutional Development on the suspension

     from office of Magistrate MN Jassiem, dated 16 November 2010:



     The Portfolio Committee on Justice and Constitutional Development, having considered the report

     on the suspension of Magistrate MN Jassiem, an additional Magistrate at Mitchells Plain, reports as

     follows:



1)    On 9 October 2006, 28 August 2007 and again 23 November 2009, Mr Jassiem wrote to the

      Magistrates Commission for approval to run his practice as an attorney while permanently

      appointed as a Magistrate.



2)    At its meetings held on 23 August 2007, the Commission resolved not to approve Mr Jassiem’s

      request to be allowed to practise as an attorney. The Judicial Head of the Administrative Region
16 NOVEMBER 2010                                                Page: 226 of 264


     was informed of the Commission’s resolution on 12 September 2007 and was asked to inform Mr

     Jassiem accordingly.



3)   It appears that Mr Jassiem was duly notified of the Commission’s resolution. The Commission

     has, however, noted with concern that Mr Jassiem is apparently still practising as an attorney and

     that he is therefore deliberately in defiance of a decision by the Commission that he not allowed

     to practise as an attorney while holding the office of Magistrate.



4)   From the contents of an affidavit dated 17 September 2009, received from the Senior Legal

     Officer of the Cape Law Society, it appears that:



           o Mr Jassiem ceased practising as an attorney on 9 October 2000 but recommenced to

               practise for own account as MN Jassiem and Associates from 1 November 2006.

           o He is the sole partner in the firm.

           o There are no other practitioners at the firm and that he personally applied for a Fidelity

               Fund Certificate for 2007, 2008, 2009 and 2010.

           o He is in possession of a 2010 Fidelity Fund Certificate and that he submitted an

               unqualified trust account audit for the period ending 28 February 2009 for MN Jassiem

               and Associates.



5)     After considering the contents of the affidavit and further correspondence received from the

       Cape Law Society, the Chairperson of the Commission directed the Secretariat to request Mr

       Jassiem to give reasons why he should not be charged with misconduct for deliberately defying

       a decision taken by the Commission on 23 August 2007. The Commission wrote to Mr Jassiem

       on 12 November 2009.
16 NOVEMBER 2010                                             Page: 227 of 264


6)    Mr Jassiem was charged with misconduct on 11 December 2009. The misconduct inquiry

      commenced on 26 April 2010. He elected to conduct his own defence.



7)    Although Mr Jassiem initially pleaded guilty to the main charge, his plea was altered to one of

      not guilty as he indicated that he never ran any practice as an attorney but was doing

      conveyancing and estate administration.



8)    In his judgment, the Presiding Officer found Mr Jassiem dishonest: He had misled the Cape

      Law Society indicating in writing on 8 October 2006 that he had the Commission’s permission

      to practise as an attorney. He had also misled his Judicial Head of Office and his conduct

      showed lack of integrity as an officer of the court.



9)    After considering all the evidence presented before him, the Presiding Officer found Mr

      Jassiem guilty of misconduct on the main count and recommended that he be removed from

      office in terms of regulation of 26(17)(b) of the Regulations for Judicial Officers in the Lower

      Courts, 1994. The findings show Mr Jassiem’s lack of integrity and honesty and that he is,

      therefore, unsuited to hold the office of a Magistrate. Mr Jassiem was given an opportunity to

      furnish the Commission with written representations in respect of the sanction recommended

      by the Presiding Officer.



10)   At its meeting held on 26 August 2010, the Commission, having considered relevant

      documents as required in terms of regulation 26(22) read with regulation 26(19) of the

      Regulations for Judicial Officers in Lower Courts, 1994, the Commission resolved to accept

      the findings of the Presiding Officer and to recommend to the Minister of Justice and
16 NOVEMBER 2010                                                Page: 228 of 264


        Constitutional Development to remove Mr Jassiem from office on the grounds of misconduct

        in terms of section 13(4)(a)(i) of the Magistrates Act, 1993.



Recommendation



Having considered the report on the suspension of Magistrate MN Jassiem, the Committee

recommends that the National Assembly confirms the suspension.



Report to be considered.



7. Report of the Portfolio Committee on Justice and Constitutional Development on the lifting of the

     provisional suspension from office of Magistrate WJM Prinsloo, dated 16 November 2010:



     The Portfolio Committee on Justice and Constitutional Development, having considered the report

     on the lifting of the provisional suspension of Magistrate WJM Prinsloo, a magistrate at Ermelo,

     reports as follows:



1)      The Minister, on the advice of the Magistrates Commission, provisionally suspended Mr

        Prinsloo from office with effect from 3 February 2010. The provisional suspension was

        confirmed by both Houses of Parliament on 1 and 4 June 2010, respectively.



2)      The Commission’s investigation confirmed that Ms S C van Wyk,, a female clerk employed at

        the Ermelo Magistrate’s Office, had filed ten complaints against Mr Prinsloo. It was alleged

        that Mr Prinsloo, during the period 18 April 2008 to 5 May 2008, had on ten different
16 NOVEMBER 2010                                               Page: 229 of 264


       occasions conducted himself in an unbecoming and embarrassing manner towards Ms van

       Wyk.



3)     The misconduct inquiry against Mr Prinsloo commenced on 29 April 2010 and was finally

       concluded on 26 July 2010. Mr Prinsloo admitted to guilt on 10 charges of misconduct against

       him. The Presiding Officer found Mr Prinsloo guilty of misconduct as charged.



4)     Afte considering all the evidence placed before him in mitigation, the Presiding Officer found

       that Mr Prinsloo’s misconduct, although very serious, did not justify a sanction of removal

       from office. The Presiding Officer ordered that Mr Prinsloo be cautioned and reprimanded by

       the Chairperson of the Magistrates Commission and the Cluster Head within a month from the

       imposition of sanction. Mr Prinsloo was further ordered to tender a written apology to the

       complainant within seven days of the reprimand.. On 12 August 2010, Mr Prinsloo appeared

       before the Chairperson and the Cluster Head and was formally cautioned and reprimanded.

       Subsequently, he also tendered a written apology to the complainant.



5)     As the Presiding Officer did not recommend that Mr Prinsloo be removed from office, as

       contemplated in section 13 of the Magistrates Act, No. 90 of 1993, his provisional suspension

       from office is no longer justified and there is no basis to uphold his provisional suspension.



Recommendation



Having considered the report on the lifting of the provisional suspension of Magistrate Prinsloo, the

Committee recommends that the National Assembly confirms the lifting of the provisional suspension.
16 NOVEMBER 2010                                             Page: 230 of 264


Report to be considered.



CREDA INSERT - T101116e-insert8 – PAGE 3955



9.     Report of the Portfolio Committee on Home Affairs on the Births and Deaths Registration

       Amendment Bill [B18B-2010] (National Assembly – sec 75), dated 16 November 2010:



       The Portfolio Committee on Home Affairs, having considered the subject of the Births and

       Deaths Registration Amendment Bill [B 18 B - 2010] (National Assembly – sec 75) and

       proposed amendments of the National Council of Provinces(Announcements, Tablings and

       Committee Reports, 3 November 2010, page 3662) referred to it, reports the Bill with

       amendments [B 18 C – 2010].



       Report to be considered.



Report of the Standing Committee on Appropriations on the 2010 Adjustments Appropriation

Bill [B 34 – 2010] (National Assembly – section 77), dated 16 November 2010



Having considered and heard evidence on the Adjustments Appropriation Bill referred to it in terms of

section 12(15) of the Money Bills Amendment procedure and Related Matters Act 9 of 2009, the

Standing Committee on Appropriations reports as follows:



1.   Introduction
16 NOVEMBER 2010                                             Page: 231 of 264


The Minister of Finance tabled the Medium Term Budget Policy Statement (MTBPS) on 27 October

2010, outlining the budget priorities of government for the medium term estimates. The MTBPS was

tabled together with the Adjustments Appropriation Bill [B34 - 2010] and the Division of Revenue

Amendment Bill [B35 - 2010] in Parliament. The Adjustments Appropriation Bill [B34 – 2010] was

referred to the Standing Committee on Appropriations and the Standing Committee on Finance to

consider and report, in accordance with their respective mandates as outlined in the Money Bills

Amendment Procedure and Related Matters Act 9 of 2009.



In preparing for the Adjustments Appropriation Bill report the Committee invited identified

Departments (see below) to make submission before the Committee:

          Department of Water Affairs,

          Department of Arts and Culture,

          Department of Health,

          Department of Trade and Industry,

          Statistics South Africa, and

          Department of Communications.



2.       Overview of the Budget Adjustments



According to National Treasury the spending for the first six months this year has increased by R26.4

billion when compared to previous year’s expenditure in the same period. The adjusted amount of

R6.2 billion was for salaries and housing allowances. An amount of R2.33 billion was adjusted for

national government while R3.81 billion was adjusted for provincial government. Even though the

2010/11 national expenditure has improved for the first six months when compared to the 2009/10

financial year in the same period, some departments have spent less than 50 per cent of their budgets
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for the first six months and have submitted requests for their budgets to be adjusted due to

unforeseeable and unavoidable expenditures and roll-overs. Although the Committee supports these

adjustments it has noted that most of the unavoidable and unforeseeable expenditure was mainly due to

the salary adjustments and housing allowances instead of policy priorities both at the national and

provincial government spheres. Affected departments in this regard include Health (48.9 per cent),

Water Affairs (37.7 per cent), Statistics South Africa (30.4 per cent), Trade and Industry (36.8 per

cent), Rural Development (38.0 per cent), Home Affairs (35.4 per cent), Public Works (37.7 per cent),

Communication (26.2 per cent) and Art and culture (44.3 per cent). The Committee is concerned about

this state of affairs which is an indication of poor planning. Some of these Departments are the key

pillars of the Medium Term Strategic Framework of government Priorities.



3.   The adjustment on policy priorities for the next three years



The Medium Term Budget Policy Statement indicated that the revised baseline allocations have been

prepared taking into account the carry through costs of the 2010 salary improvements, higher costs of

municipal rates and service charges, identified savings and reprioritisation proposals. In the 2010/11

financial year the overall increase amounts to R7.3 billion while a R67 billion increase can be seen

over the Medium Term Expenditure Framework. The table below shows that an amount of R22.1

billion has been set aside for policy priorities over the MTEF period, proposed wage bill of R26.3

billion as well as adjustment to baseline of R40.8 billion. The Committee supports the adjustment

allocations, however it has noted that the proposed wage bill over the MTEF is much higher than the

amount allocated for policy reserves due to the inflationary wage settlement. This is a cause for

concern. The Committee has noted that some of the departments have not yet filled their vacant

positions, but have instead shifted the funds that were budgeted for vacant posts to other programmes.

The proposed wage bill seems to be escalating when compared to the allocation for policy priorities.
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This means that fewer funds are being allocated for development and implementation of programmes,

and will thus have a negative impact on the quality and completion of capital projects.



Table 1: Adjustment Allocation for MTEF

Policy Reserves             R22.1 billion

Adjustment to Baseline      R40.8 billion

Proposed Wage Bill          R26.3 billion

Source: National Treasury (2010)

Government prioritises its resources in the following areas:



      job creation initiatives and realigning support to business to enhance employment

       opportunities;

      enhancing the quality of education and skills development;

      improving the provision of quality health care;

      driving a more comprehensive rural development strategy; and

      intensifying the fight against crime and corruption.



These priorities are supported by a government strategy which includes the shifting of resources to

labour intensive sectors of the economy. Furthermore, government will strive to improve State

performance with specific regard to the delivery of services to the poor. In light of the current budget

pressures, the Committee is of the view that limited resources should be utilised to produce maximum

output, without compromising the quality of services.



The Medium Term Budget Policy Statement for 2010 has outlined the macroeconomic assumptions,

fiscal and public expenditure dimensions of proposed development path. It emphasised the need for
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the increased infrastructure investment spending to faster growth and to reduce budget deficit over the

next period. The estimated reduction of 4.1 per cent of the budget deficit for the 2010/11 which is

projected to improve to 3 per cent of the GDP by 2013/14 financial year is noted. The government’s

outcome approach which provides framework for enhanced monitoring of service delivery including

guidelines for results driven performance that forms part of the basis of ministerial performance

agreements as well as related service delivery agreements is a step in the right direction. It was noted

that the expenditure has increased by R67 billion relative to baseline over the Medium Term

Expenditure Framework which is informed by the 12 outcome policy priorities which include

education, health, infrastructure, and job creation.



      job creation initiatives and realigning support to business to enhance employment

       opportunities;



The Committee believes that capital projects are the backbones of job creation which is part of policy

priorities. However, the Committee remains concerned that the unspent funds amounted to R12.4

billion which was budgeted for capital projects in 2009/10 financial year. The Committee has noted,

nonetheless, the new approach adopted by government which seeks to address weaknesses in

budgeting and planning in such projects. The Committee identified a number of weaknesses and

challenges in the area of procurement and supply chain management, and has since made

recommendations in regards to this. Therefore, the interdepartmental team and proposed scrutiny of

non governmental agencies and other accounts which is informed by these findings is one step in the

right direction. In support of the job creation process, the Committee believes that such areas in

government need to be monitored and evaluated since these are the key drivers of the capital projects

procurement. The delays and termination of tenders due to irregularities is completely unacceptable as

it hampers the levels of job creation and service delivery.
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The Department of Water Affairs reported that to date it has created about 26 331 job opportunities

through the Working for Water Programme. While the Departmental budget has been adjusted from

R7.9 billion to R8.2 billion the Department has only spent 37. 7 per cent in the first six months, part of

the adjustment was R35.6 million received from other adjustments. The Committee was concerned

about the level of virements and shiftings of 36.7 per cent which exceeded the 8 per cent permitted by

the Public Finance Management Act. As provided for in the PFMA, virements exceeding this threshold

have to be approved by Parliament. Failure to attain Parliamentary approval will lead to the Auditor

General reporting this as an unauthorised expenditure. The Department has reported an under

expenditure in the first six months of 37.7 per cent. The Department of Water Affairs indicated that the

under expenditure was due to the late submission of invoices by the Department of Public Works

(DPW), unspent funds of Change Journey and Master Systems Plan (MSP), unspent funds allocated to

replace Masibambane, regional bulk infrastructure: legal issues around Nandoni Dam project, delay in

signing of Memorandum of Agreement by Municipalities, delay in submission of invoices by service

providers.



The budget of the Department of Arts and Culture has been slightly adjusted from R2.40 billion to

R2.44 billion. The Department has only spent 44.3 per cent in the first six months of 2010/11. Part of

the adjustment was a R12 million roll over for 2010 FIFA World Cup and R18.6 million for Investing

in Culture projects. The Department indicated that some 2010 World Cup projects were not finalised in

March 2010 due to the fact that the event was in June 2010. Therefore the Department had to utilise its

2010/11 budget to finance these projects. The R12 million roll over will be utilised to supplement the

budget for operational costs, legal fees, machinery rental, audit fees and SITA account which has been

inadequately funded. An amount of R3.9 million was added for higher personnel remuneration

increase which includes housing allowances.
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The Committee was concerned about the lack of spending in the Investor to Culture project hence it is

the view of the Committee that such projects are instrumental in the creation of jobs and poverty

alleviation. The Department also indicated that an amount of R18.6 million could not be spent due to

the investigation that was still being conducted in the Investor to Culture project which was aimed at

verifying the legitimacy of various projects. The Committee needed more clarity on the R100 million

expenditure which was used to maintain playhouses. The Department reported that it is responsible for

all the playhouses which are located in various provinces. The Committee acknowledged the progress

made thus far and also indicated that programmes such as EPWP, Working for Water, Working for

Energy incentives need to be well supported and ensure that all provinces are spending their

allocations according to planned targets in order to expand the levels of job creation.



The expenditure of the Department of Trade and Industry at end September was 36.8 of the adjustment

appropriation of R6.2 million for the year as a whole. In comparison to the mid-year expenditure in

2009/10, the expenditure in the first six months of 2010/11 decreased by 25.2 percent. The Department

of Trade and Industry also reported on a number of enterprise investment project that were supposed to

create jobs such as the East London industrial development zone which created higher than the

estimate for the year. Due to the economic crisis some projects slowed down in this regard than

estimated such as the Richards Bay industrial development zone. Creation of decent employment

through inclusive economic growth was better than anticipated 230 projects where implemented,

compared to the projected 275 for the year. The total value of investment and export credits

programme has already reached its target to create 19 000 jobs for the year.



The Department of Communication was also invited to be part of the MTBPS process due to its under

expenditure of 26 per cent in the first six months of the 2010/11 financial year. The Committee was

concerned at the lack of cooperation and unprofessionalism showed by the Department upon being
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invited to appear before it. This was seen as a clear indication that the Department undermines

Parliament and its processes. The Committee invited the Department to a public hearing on the

Adjustments Appropriation Bill but the Department could not honour the invitation. When the Acting

Chief Financial Officer (CFO) appeared before the Committee, the Committee expressed it’s

displeasure at the appearance of the CFO instead of the Acting Directors General as the Accounting

Officer of the Department. The Committee indicated that this would limit its engagement in seeking

clarity on crucial issues which the Acting CFO might not be able to account on as he is not the

Accounting Officer. No letter of apology was received from the Acting DG for not being able to attend

the hearing.



The expenditure of the Department as at end September was at a concerning figure of 26 per cent In

comparison with the mid-year expenditure in 2009/10, the Department had spent 31 per cent which

was also an under expenditure. In the current financial year this became even worse since it has

decreased by 5 percent when compared to the previous financial year. According to the department the

reasons that led to under spending were mainly due to capacity constraints, delays in the

implementation of certain projects, reshuffling and backlogs in the Department. However, the

Department is convinced that with the reconstitution of the Department and the appointment of the

Acting General-Director things are going to improve.



During its oversight the Committee discovered that more jobs can be created in the EPWP, through

innovativeness and making sure that labour intensive programme is a condition of the contract between

the Department in question and the contractor. The Committee also welcomes a new economic growth

path which is aimed to create job opportunities particularly for young people. The Committee

welcomes the proposed assessment for youth employment projects and incentive scheme which will be

operating through tax system which aims to encourage the employment of youth in businesses as well
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as in the non governmental sectors. The MTBPS outlined the allocation of R1 billion for 2011/12 and

R2 billion for 2012/13 and R3 billion for 2013/14 which is aimed at supporting projects that

demonstrate a potential of cost effective job creation over the MTEF.



Despite the number of jobs that have been created in various areas, the Committee remains concern

about the level of virements and shifting of funds which could have contributed towards creating more

job opportunities.



      improving the provision of quality healthcare



The Health Sector Delivery Agreement aims to reduce infant and maternal mortality rate, reduce child

mortality to 30-40 per 1000 births over the medium term and also make further progress in preventing

and controlling HIV/AIDS. However, the mid term report of the Department of Health indicated that

severe staff shortages in forensic chemistry laboratories have led to backlogs and targets not being met

in this regard. Furthermore the Department acknowledged that the delays in the filling of vacant posts

in the National Department of Health have lowered the accreditation process, though the audits tools

have been completed and piloted. However the Department must have a programme in place to

respond to this challenge as well as to meet the targets and Millennium Development Goals by 2014.



While the Millennium Development Goal (MDG) 5 reported that there has been an improvement in the

antenatal care coverage and usage of modern contraceptive method maternal mortality is still amongst

the challenges. The MDG6 reported that HIV prevalence has been stable and there seems to be a

decline between the ages of 15- 24 years old from 10 to 8.5 per cent in 2008. Millennium Development

Goals 4 acknowledges the fact that the infant and child mortality rate is unacceptably high in South

Africa compared to international levels. The committee supports the interventions such as
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immunisations, prevention from mother to child HIV infection which has been undertaken by the

Department of Health. This will assist to reduce child mortality, enhance nutrition and primary health

care. The Committee supports the proposed spending which will focus on improving the monitoring of

women and infants after child birth, upgrading support and training paediatric and maternal workers in

district hospitals.



However, when the Committee raised concerns about the increase in the impact of HIV on infant and

child mortality. The Department indicated that there has been a high level of inaccurate reporting on

such matters done by different organisations which brings a lot of confusion in the society.

Furthermore, the Department indicated that the infant and child mortality cannot be treated in the

isolation of morbidity. While the Committee was concerned about this level of inconsistency and

inaccurate information, it advised the Department to bring all of these organisations under one roof to

come up with the most relevant and accurate statistics. The Committee supports the initiative taken by

provincial health departments to remedy and improve their financial management. The Committee

welcomes the agreement on the Occupation Specific Dispensation (OSD) reached between the

Department and 40 health therapeutic groups to retain most critical and skilled health staff and the

prioritisation of filling important vacant posts.



It is noted that though the department has under-spent in the first six months, the budget of the

department has been adjusted from R21.4 billion to R21.6 billion an amount of R146 million was

adjusted to its budget which includes R49.6 million from roll-overs and R105 million from

unforeseeable and unavoidable expenditure. This also includes an amount of R9.7 million which was

adjusted for increased remuneration on personnel and housing subsidies for certain programmes. The

Department made virements and shifting of R6.1 million or 1.4 per cent, this movement of funds was

mainly done in order to strengthen service delivery on programmes 1 and 3. The Department and
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treasury indicated that most of the shifting and virements were done from the savings made due to the

reduction on consultants and special services in the 2010 FIFA World Cup expenditure. While the

Committee has noted the movement of funds and under spending of the department in the first six

months, during its oversight the Committee identified a number of challenges this include the non

availability of mobile or immobile clinics in some areas, usage of mud structures as clinics, prepaid

electricity and solar panels of which some of these require maintenance and repairs yet it was not clear

whose responsibility it is to maintain this facility.



The Committee welcomes the additional amount of R1.5 billion to Comprehensive HIV and Aids

programme as well as R7.3 billion which was added to the provincial equitable share to address the

priority issues in 2010/11. The Committee supports the introduction of Health National Insurance

Scheme (NHI) which is going to be phased in by 2012/13 financial year. This programmes aims to

improve and bring about the universal access to health facilities for all South Africa whether reach or

poor. While the Committee appreciates the progress that have been made with regards to the Hospital

Revitalisation programme but it was concern about the slow pace and under performance of this

programme in other provinces.



       enhancing the quality of education and skills development



Most of the challenges facing the education system include substantial backlogs in buildings and

facilities, insufficient number of qualified teachers, poor school management and high absenteeism

among students. The funding of R40 billion to provinces in the baseline to eradicate unsafe school

buildings is welcomed and the committee will monitor the performance of such allocations. During its

oversight visit undertaken in August 2010, the Committee found that, some provinces were under
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spending on certain conditional grants particularly those that are earmarked for school infrastructure.

The under-spending persisted despite the high level of inappropriate structures including mud schools.



The Committee’s concern is that this culture compromises the dignity and safety of the learners and

hampers the delivery of basic services such as water and electricity. The proposed national assessment

in literacy and numeracy for all grade 3 and 6 learners which will be conducted as part of the long term

exercise to benchmark and raise educational level is a step in the right direction. While the learner

work books and teacher lesson plans for literacy and numeracy for grade R to grade 6 will be provided

in the beginning of 2011, the Committee is still concerned whether or not appropriate measures have

been taken by the Department of Basic Education to avoid delays in the distribution of workbooks

which occurred in the current financial year resulting in the cancellation of the tender.



The proposed partnership between the Department of Basic Education and the Development Bank of

Southern Africa to support educational infrastructure is welcomed. The Committee has noted the

proposal to increase the number of fully qualified teachers which will be supported through the Funza

Lusaka Bursary Programme. The Committee supports the additional R5.4 billion which is aimed at the

implementation of the Occupation Specific Dispensation (OSD) for the next three years. Although the

Committee supports this allocation for the baseline, it remains concerned about the under expenditure

by the Department of Basic Education during the first six months of the 2010/11 financial year.



The Committee noted that the Department has received a R1 million roll over and an adjustment

amount of R4.7 million which was divided almost to all programmes. An additional R6.9 million was

for the higher personnel remuneration and housing subsidy allowance and an amount of R1.9 million

was transferred for the function shifted to the Department of Higher Education and Training for an
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annual contribution to the Common Wealth of Learning. The Department has spent 45.9 per cent in the

first six months of 2010/11 financial year.



The mid-year performance report of the Department of Basic Education indicated that the Department

has exceeded its target of new 6000 learners enrolled for Kha Ri Gude mass literacy campaign in the

first six months. The Kha Ri Gude campaign aims to improve the basic literacy and numeracy levels of

adults. The Department managed to achieve 2000 more new learners; this was due to savings made in

the production of learner and educator support materials and the costs of stationery which allowed

more learners to be accommodated in the programme. The report also indicated that the number of

learners had exceeded the yearly estimate which ranged between 480 000 and 486 000 as a results of

more learners being enrolled.



The proposed improvement and expansion of University and Further Education and Training

enrolment is a step in the right direction. This will assist in addressing the misalignment between the

needs of the labour market and the education provided by institutions. Even though the Department has

spent 72.3 per cent in the first six months, the Committee noted that the majority of this expenditure

went to the transfer budget which was earmarked for NSFAS, Further Education and Training (FET)

colleges and funds for the establishment of the new Department. The Committee’s view is that there is

need to ensure that the FET colleges are properly utilised and enjoy the same kind of prominence as

universities do.



      driving a more comprehensive rural development strategy



Land Reform and Agricultural Development have a considerable potential to contribute to rural

development, job creation, poverty alleviation, food production and redressing the past dispossession
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of land.   It is the Committees view that the Department of Rural Development is not the only

department which can fast track rural development. The complexity of rural development requires a

number of Departments to come on board such as Agriculture, Energy, Public works, Water Affairs,

Social Development, Cooperative Governance and Traditional Affairs, Trade and Industry, Economic

Development, Education, Health and Transport. The role of Department of Rural Development is to

coordinate such programmes.



The Committee has noted the additional funding to address the 7000 outstanding land claims. It also

noted the new model which is going to be piloted aimed at supporting emerging farmers in partnership

with the Land Bank. The Committee supports the proposed additional funding for provinces to

improve the quality of extension services which is offered to newly settled farmers. While the

Committee supports all these interventions, it is its view that a lot still need to be done to drive a more

comprehensive rural development programme. While the 2010/11 MTBPS has made a number of

interventions, it seemed not to be suggesting an intervention relating to challenges identified during the

implementation of Land Assistance Act in the land reform programme.



The Land Assistance Act No 126 of 1993, makes provision for emerging farmers to be assisted in

order to further their agricultural aspirations as well as change land ownership in the country through

Land Redistribution Programme by Government. The Act is often misused for corrupt purposes by

way of sub-divisions and the resale of subdivided land and illegal evictions.



      intensifying the fight against crime and corruption



The Annual Performance Plan (APP) indicates that the strategic priorities of the Department of Police

are to combat crime to ensure that all people are safe. Whilst there has been a decrease in crime in
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general in the first quarter 2010/11 in some areas such as contact related crime, property related crime,

and detection, the rate of crime has increased. Irrespective of the progress made to reduce the crime

rate in certain areas, levels of crime are still unacceptably high in South Africa. It is well understood

that the Annual Performance Plan (APP) of the Police was revised after the revision of the Estimate of

National Expenditure 2010. The main focus of the Crime Prevention Programme is precisely to reduce

crime levels specifically of the trio crimes and crime against women and children as well as the

implementation of a comprehensive crime prevention strategy which will be focusing on reducing

illegal firearms.



It is the view of the Committee that the reduction of crime mainly depends on members of the Police

response and visibility together with the involvement of society at large. In its annual report, the

Department of Police indicated that part of the challenges the Department is facing include the court

case backlog, prisons overcrowding, high proportion of violent crime, as well as high rate of

recidivism. The Committee supports an additional funding over the MTEF which seeks to expand

detective services, crime intelligence and crime prevention particularly in local stations and the

proposed increase of Police members from 200 660 to 203 025 by 2014/15. Part of the capacity

expansion over the MTEF, will be to increase the Special Investigation Unit (SIU) to 650 members by

2013/14 to fight corruption. The Committees welcomes this move since the fight against crime and

corruption is one of the government priorities for five years.



The budget of the South African Police Service (SAPS) has been adjusted from R52.5 billion to R53.5

billion for the 2010/11 financial year. Therefore the total additional budget amounts to R973 million

from other adjustments. This amount has been added precisely to address the issue of increase in

remuneration packages and housing subsidy for various programmes, visible policing being the

highest. Even though the Committee supports the adjustment but it is still concerned that the
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department had only spent 46 per cent in the first six months of 2010/11. This level of under

expenditure is attributed to the slow spending on Information Technology Service which is rendered

by SITA.



Furthermore, the slow spending was also attributed to delays in procurement processes such as the

awarding of six tenders by the SITA for Integrated Justice Services Programme (IJSP) in the first six

months. The 2009/10 Annual Report of the Department of Police has highlighted some of the

challenges that the Department is faced with. These include the lack of control systems within the area

of supply chain management, especially the management and controls of assets. The Committee is

concerned about this state of affairs since the larger portion of the budget is largely dominated by

current payments which accounts for R49.3 billion. Part of this figure goes to goods and services and

to capital assets. To this end the Committee is of the view that urgent action needs to be taken by the

Department to address these supply chain management issues.



Although the Committee did not engage with the Department of Police, the Annual Report of the

Department indicates a high level of expenditure under goods and services which is dominated by

consultants, contractors, agencies or outsourced services. This is indicative of the lack of capacity.

This level of expenditure has increased from R1.22 billion in 2008/09 to R1.44 billion in 2009/10. Of

note is that the largest portion of this amount was for contractors (R622 million in 2008/09 to R816

million in 2009/10). The second largest expenditure was for agencies and other outsourced services

which increased from R497 million in 2008/09 to R516 million in 2009/10. Payments for

infrastructure and planning consultants increased from R3.4 million in 2008/09 to R5.3 million in

2009/10. The Committee is concerned about the utilisation of financial resources on consultants

instead of the Department building its own internal capacity thereby creating more job opportunities.
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This higher level of expenditure on consultants is an indication that consultants are used both for

policy work and even for functions which SAPS is supposed to have in its in-house capacity.



The Committee remained concerned about the capital work project which took longer than expected

particularly the building of Inanda and Esikhawini police stations. According to the Annual Report of

the South African Police Service, the Department of Public Works was responsible for these projects

and the costs of these projects ended up escalating higher than the projected budgets. It is the view of

the Committee that in order for the priorities of government to be achieved, these priorities need to be

clarified and prioritised by all stakeholders during the budgeting and planning stage. It is also the view

of the Committee that planning for the priority areas of government should be taken more seriously

and can not be treated in the same manner as none prioritised areas. Reporting, transparency and

accountability in these areas should be enhanced at all spheres of government so that problems and

challenges are identified and addressed accordingly.



5.       Findings:



          The Committee found that there is a clear persistence of the non compliance with the provision

           of section 43 of the Public Finance Management Act which allows the Departments to make

           virements or shiftings of not more than 8 per cent. In the first six months of 2010/11 financial

           year the following departments have shifted and vired more than 8 per cent which then needs to

           be approved by Parliament: the departments of Water Affairs, Trade and Industry, Rural

           Development, Statistics South Africa, Arts and Culture, Higher Education, Correctional

           Services, Defence, Human Settlement, Science and Technology, and Tourism.
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     Subsection (b) of Section 43 of the PFMA does not allow the money which is earmarked for

      transfers to be shifted to defray current payments. The Committee found that the departments

      of Art and Culture, Defence and Water Affairs in shifting their funds have not complied with

      this provision of the PFMA since some of their transfer budgets were shifted to defray current

      payments.



     Subsection (c) of section 43 does not allow the utilisation of capital budget to defray current

      payments. The Committee found that, contrary to this provision, the following departments

      have defrayed current payments through capital budgets: International Relations and

      Cooperation, Statistics South Africa, Higher Education, Correctional Services, Defence, Rural

      Development and Land Reform, Water Affairs.



     The Committee established that the delays in the completion of two Police stations (Inanda and

      Esikhawini) by Department of Public Works has led to escalated costs of building these

      stations when compared to the initially projected costs.



     Most of the adjustments have been made to accommodate the increased remuneration of

      employees, housing subsidies and roll-overs. The Committee also found that most of the

      shiftings and virements were done from budgeted vacant posts under the guise that departments

      are saving instead of under spending.



     The under expenditure in the Department of Health was due to delays in finalising wage

      agreements, accruals amounts still to be paid, Capital expenditure funding being reviewed to

      address the turnaround strategy and the lack of spending on the Hospital Revitalisation
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          programme in some provinces such as Mpumalanga, KwaZulu-Natal, Free State and Eastern

          Cape.



6.       Committee Recommendations



The Standing Committee on Appropriations, having considered the adjustments Appropriations and

heard comments from identified stakeholders, recommends the House approves the adjustments

Appropriation Bill [B34 – 2010] (National Assembly - section 77) without amendments. The

Committee further recommends the following:



         That the National Treasury should monitor compliance with section 43 of the PFMA and report

          its findings to Parliament. The National Treasury must regularly engage Parliament on the

          Money Bills Amendment Procedure and Related Matters Act and the Public Finance

          Management Act in respect of virements amounting to more than 8 per cent to avoid

          irregularities;



         That, in the event that funds are shifted, the relevant departments should ensure that their

          budgets are aligned to their respective strategic plans and must be utilised for the intended

          purposes;



         The Department of Basic Education and Public works should draw up a costed plan for the

          building of schools and eradication of mud schools;
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      The Department of Education and the Department of Transport should draw up a costed plan to

       address the plight of learners in poor rural areas who still travel long distances to get to school;

       and



      The Department of Health should expedite the implementation of the Hospital Revitalisation

       programme so as to improve the level of availability, affordability and accessibility of health

       facilities for TB, HIV and AIDS, and other diseases.



The Standing Committee on Appropriations agrees to the Adjustments Appropriations Bill [B34 –

2010] (National Assembly - section 77) without amendments.



Report to be considered.



Report of the Standing Committee on Appropriations on the 2010 Medium Term Budget Policy

Statement, dated 16 November 2010



Having considered the 2010 Medium Term Budget Policy Statement and heard comments from

identified stakeholders, the Standing Committee on Appropriations (the Committee) reports as follows:



1. Introduction



The Minister of Finance tabled the Medium Term Budget Policy Statement (MTBPS) on 27 October

2010, outlining the budget priorities of government for the medium term estimates. The MTBPS was

tabled together with the Adjustments Appropriation Bill and the Division of Revenue Amendment Bill

in Parliament. The MTBPS was referred to the Standing and Select Committees on Appropriations
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(the Committees) to consider and report, in accordance with their respective mandates as outlined in

the Money Bills Amendment Procedures and Related Matters Act No. 9 of 2009. Among its

responsibilities, as per Section 6(8) of the aforementioned Act, the Committees are required to

consider and report on the following issues:

          the spending priorities of national government for the next three years;

          the proposed division of revenue between the spheres of government and between arms of

           government within a sphere for the next three years; and

          the proposed substantial adjustments to conditional grants to provinces and local government,

           if any.



This is the second MTBPS introduced in the Fourth Parliament particularly after the introduction of

the Money Bills Amendment Procedures and Related Matters Act No. 9 of 2009. The MTBPS

provides the framework within which each sphere has to then prepare detailed budgets. The Money

Bill Amendment Procedures and Related Matters Act affords Parliament an opportunity to make

recommendations and changes to the fiscal framework and the Division of Revenue. While Parliament

is required to make recommendations, it is important for Parliament to take into account inputs from

other stakeholders such as civil society, labour, businesses, Chapter 9 institutions and others. Through

the 2010 Medium Term Budget Policy Statement, it was indicated that South Africa needs to forge a

new growth path to focus on its own specific transformation challenges which include the structural of

wealth, ownership and control of resources, options for empowerment and broadening participation in

the economy, access to land and, improving public education and health.



2.       Medium Term Spending Priorities



Government prioritises its resources in the following areas:
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           job creation initiatives and realigning support to business to enhance employment

            opportunities;

           enhancing the quality of education and skills development;

           improving the provision of quality health care;

           driving a more comprehensive rural development strategy; and

           intensifying the fight against crime and corruption.



3.        Budget Estimates for the 2010/11 Financial Year



Table 1 (below) summarises Budget Estimates for the spheres of government



Table 1: Budget Allocation for the 2010/11 Financial Year

                                  Column A         Column B                Column C

     Sphere of Government         2010/11          2010/11                 Amount

                                  allocation       adjustments             adjusted

                                  R’000            R’000                   R’000



     National                       527 001 492            519 980 624             7 020 868

     Provincial                     260 973 745            265 139 448         -4 165 703

     Local                           30 167 706               30 558 566           -390 860

     Total                          818 142 943            815 678 638             2 464 305



The total allocations to national departments decreased by R7.0 billion, allocation to provinces

increased by R4.1 billion and allocations to local government increased by R0.3 billion.
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4.   Hearings of the 2010 Medium Term Budget Policy Statement



The Standing and Select Committees on Appropriations jointly invited the National Department of

Cooperative Governance (DCoG), South African Local Government Associations (SALGA), Financial

and Fiscal Commission (FFC), Human Science Research Council (HSRC) to comment on the MTBPS

as they were considered strategic in the implementation of policy priorities. The MTBPS Hearings

took place on the 2nd and 3rd November 2010.



4.1 Financial Fiscal Commission



The Financial and Fiscal Commission (FFC) highlighted the potential risks to the moderate economic

growth projections for the South African economy, which include: interruptions in the global recovery,

exchange rate volatility, human resource needs and the proposed fiscal austerity/consolidation

framework over the medium-term.



The FFC indicated that for the South African economy to grow faster; a more inclusive economic

growth strategy that is multi-faceted is required in its approach. The strategy should focus on poverty

alleviation, the labour absorption capacity of the economy, the productivity of public expenditure (i.e.

quality improvements in access to social services), accelerated implementation of approved

infrastructure projects and increased spending on maintenance and rehabilitation and the rooting out of

corruption in all sectors of economy. The FFC requested that more detail be provided in relation to the

economic policy direction of government which frames the fiscal environment in which the

intergovernmental fiscal relations system must operate for effective Commission engagement.
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The FFC raised concerns with respect to the downward revisions of agriculture and health spending

over the medium term, particularly in light of the fact that these sectors contribute positively to

economic growth and form part of the identified 12 national priority outcomes. The FFC further raised

concerns about lack of consultation by some government departments when making financial decisions

as per Section 1(3) (1) of the Financial and Fiscal Commission Amendment Act No 25 of 2003.



The FFC noted that national government’s share of the Division of Revenue declines over the 2010/11

Medium Term Expenditure Framework (MTEF), whereas the provincial and local government shares

increases over the same period. The FFC submitted that the current formula for determining the Local

Equitable Share (LES) may be unconstitutional in respect of the Revenue-Raising Component (RRC).

Furthermore, the FFC cautioned against potential negative effects on middle income municipalities

resulting from the government’s approach to focus on targeted funding for poorer municipalities to the

detriment of middle income municipalities.



The FFC also indicated that the biggest expenditure challenge in the provincial government is the

rising personnel spending compared to other spending items that lead to growth and development.

With respect to the local government sphere, the FFC said that the biggest expenditure challenges are

the poor performance against conditional grants (particularly infrastructure) highlighted by rollovers

amounting to R1.8 billion in the 2010 / 2011 financial year.



With respect to proposed substantial adjustments to conditional grants allocations to provinces and

local government the FFC noted the following:



   Education Conditional Grants: Dinaledi schools – Mathematics and Science proficiency are

    identified as key outcomes, but low pass rates do not augur well for the future;
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   Health Conditional Grants: Comprehensive HIV and Aids programme – There is a mismatch

    between the burden of disease and the population;

   National Tertiary Services Grant: The health expenditure is dominated by tertiary hospitals,

    therefore the next tier of hospitals are negatively affected and hence the same effort should be

    directed towards primary health care facilities;

   Eradication of Backlogs in Education and Health Infrastructure Grants – The government should

    reconsider its decision to discontinue grants in these areas;

   Agricultural Grants: Namely, CASP, Ilima letsema and Mafisa – The FFC agrees that it makes

    economic sense to merge these conditional grants into one comprehensive agriculture finance

    programme as their impact individually is limited; and

   Expanded Public Works Programme (EPWP) Incentive Grant for Infrastructure – The FFC noted

    low level of spending from this grant. The FFC is of the view that more effective reporting of

    EPWP projects will allow municipalities to access this incentive grant.



The Committee asked the FFC to elaborate what it meant by the unconstitutionality of the revenue

raising component of the local equitable share formula. The FFC explained that the unconstitutionality

of the LES formula refers to the current practice whereby deductions or additions to municipalities’

equitable share are based on actual revenue collection figures, which disregards the municipality’s

capacity to collect revenue and the degree of effort made by the municipality to collect all revenues

owed. The FFC advised that this is in contravention of the Constitution. Hence, the FFC recommends

that the LES formula should contain a revenue-raising capacity variable.



4.2 Department of Cooperative Governance
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The Department of Cooperative Governance (DCoG) provided the Appropriations Committees with an

overview of key focus areas and budget priorities over the 2011 MTEF that will contribute to the

national priority outcome 9: “A responsible, accountable, effective and efficient local government

system”. Key strategies and programmes proposed by the Department for the 2011 MTEF include: a

differentiated approach to supporting local government (i.e. covering aspects of finance, services and

labour), propose a single window of coordination, support to municipal finance and administration

capability, propose a refined ward committee model to deepen democracy, improved support to human

settlements outcomes, implementation of the community work programme and accelerated access to

basic services.



The DCoG indicated that it has requested additional allocations to the baseline allocations of municipal

transfers, which include the Municipal Infrastructure Grant (MIG), Bulk Infrastructure Fund (BIF) and

the Local Government Equitable Share (LGES): The Department of Cooperative Governance

submitted that:



   An additional allocation of R16.9 billion over the 2011 MTEF to the MIG baseline is requested on

    the basis of meeting sector target to eradicate infrastructure backlogs;



   An additional allocation of R26.3 billion over the 2011 MTEF to the BIF is requested on the basis

    of unlocking the delivery of reticulation services by funding bulk infrastructure and procuring well

    located land towards addressing backlogs in order to ensure universal access to basic services. The

    DCoG explained that the BIF will be specifically used to upgrade, refurbish and rehabilitate bulk

    infrastructure such as Water and Waste Water Treatment Works; and
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   An additional allocation of R4.2 billion over the 2011 MTEF to the LGES is requested on the basis

    of complementing the institutional component of the LGES by funding critical skills in

    municipalities, prioritising water and sanitation over the MTEF in order to build long-term

    municipal institutional capacity through the proposed reconfigured Municipal Systems

    Improvement Grant (MSIG) into the Local Government Institutional and Systems Support Grant

    (LGISSG).



The DCoG further submitted that additional funding has also been requested for the following

departmental programmes: Special Purpose Vehicle, Disaster Management, and the Implementation of

the Masters Systems Plan for National Disaster Management Plan, Municipal Infrastructure Audit,

Local Government Turnaround Strategy and the Township Renewal Programme.



The DCoG has identified a lack of cooperation and coordination between the three spheres of

government as a risk and will attempt to mitigate the risk by proposing that the SPV be a single

window for coordination among the three spheres of government. However, the proposed model still

awaits cabinet’s approval.



4.3 South African Local Government Association



The South African Local Government Association (SALGA) indicated that the economic recovery was

a welcome sign for local government. However, SALGA also cautioned that the economic recovery

bears pressure on demand for quality municipal services and hence the ability of municipal services to

support the expansion of productivity within local industries and the sustainability of key economic

sectors operating within municipal boundaries.
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SALGA further recommended a comprehensive review of the local government fiscal framework to

address amongst others, the limited vertical share. There should be a systematic review of baselines to

ensure:



   Revenue allocations to local government as a whole are congruent with its full range of

    developmental and service delivery responsibilities; and

   The vertical share of local government meets the increasing demand for municipal services.

Furthermore, this should be coupled with efforts to build the capacity of weaker municipalities to

spend efficiently and effectively.



A concern was raised as to whether the proposed minor adjustments to the local government equitable

share (LGES) formula to allocate more funding towards poorer municipalities are substantive enough

to address institutional challenges, such as: the need to appoint skilled personnel to manage finances,

human resources, service delivery functions and core administration functions. In addition the

availability of credible data on key variables relating to the socio-economic demographic and spatial

profiles of municipalities need to be addressed not only to update the data underpinning the LGES

formula, but also a more fundamental review of the structure of the formula itself.



With regard to conditional grants, SALGA made the following submissions:

   The management of grants should be reviewed;

   The approach on conditional grants should not be a one size fits all, it should be according to

    municipal needs and its capacity to deliver;

   Analyse past performance to improve the operational effectiveness of the grants;

   A conditional grant for rural municipalities for job creation and economic development should be

    introduced;
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   Disaster management funding should reach municipalities faster;

   Electricity Demand Side Management funding must be effectively targeted; and

   Increase funding for the water services operating subsidy grant to assist municipalities struggling

    with refurbishment and maintenance.



Since infrastructure funding remains a challenge; it was argued that there should be an explicit link

between municipal infrastructure grant (MIG) allocations and LES allocations especially in smaller

municipalities. Funding should be set aside through MIG or outside for the funding of refurbishment

and upgrade of existing infrastructure in smaller and poorer municipalities. SALGA welcomed the

envisaged devolvement of the housing and public transport functions to cities and the increase in the

Devolution of Property Rates Grant.



The Committees on Appropriations raised a concern as to the perceived lack of support provided by

SALGA with respect to capacitating municipalities. SALGA responded that in support of

municipalities they are partnering with universities who are service providers to strengthen the

capacity of financial management, for example University of Witwatersrand is offering a course in

financial management, expenditure and oversight. Furthermore, SALGA reported that they are

reviewing the possibility of electing a permanent member to the National Council of Provinces

(NCOP) to provide support to the Committees concerning local government matters.



Furthermore, the Committees on Appropriations sought clarity on the impact of the new demarcations

and SALGA reported that there are 382 new wards in the country which will have a huge financial

burden to the government particularly in Johannesburg where there are more than 60 new wards. This

also implies the increase in the number of councillors which increases the amount allocated in respect

of the institutional component of equitable share which funds the payments of councillors.
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4.4 Human Science Research Council



The Human Science Research Council (HSRC) applauds the Appropriations Committees and the

Ministry of Finance for enabling public engagement with the national budget priority setting and

decision making processes. Further, it applauds efforts to chart a new inclusive growth path that serves

as an agenda for collective action.

The HSRC identified the following strengths in respect of the MTBPS:

   Employment is clearly stated as the government’s top priority, however the MTBPS need to be

    complemented by more detail as to how the government will implement a new development path

    that will create 5 million jobs within 10 years;

   It takes into account the scale of challenges faced in areas of poverty, education and health;

   It recognises cities as engines of growth, thus requiring more investment in infrastructure to

    address bottlenecks and backlogs;

   It recognises that expanding informal settlements need investment; It provides for faster growth in

    municipal spending compared to growth in provincial and national expenditure;

   It recognises that investment in transport can improve living standards for workers, cut transport

    costs and increase productivity; and

   It gives due attention to rural development, youth employment, the Industrial Policy Action Plan

    and the Community Works Programme.



The HSRC noted the insufficiency of progress with respect to broad education, health and economic

indicators. The HSRC recommend that investment in these broad areas targeted for priority need to be

further specified. With respect to Education, the challenge is how and where to intervene, in order to

break the cycle of the education and development trap. Substantial investments in early learning,
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through reception year and foundation phase of schools are critical to breaking the stagnation of low

performance scores.



The Aids epidemic is stabilising, however intensive efforts are still required. The 3 rd national HIV

prevalence, incidence and communication survey (2008) revealed a number of positive trends. A

decline in the HIV prevalence in the teenage population (15-19 years) has been observed, as well as a

decline in mother-to-child infections. However, HIV infection risks remain high in the country, with

women aged between 25 and 29 years continuing to record very high levels of HIV infection.



In respect of economic growth, the HSRC noted the importance of a knowledge economy. A

knowledge economy contributes to the growth of an economy. South Africa scores are low in respect

of the knowledge economy index and the number of full time equivalent researchers per 1 000 people

compared to its counterparts. Furthermore,       there has been slow uptake of the Research and

Development (R&D) tax incentive by the private sector and to what extent has the requisite

institutional reforms and actions to support the incentive regime been implemented by government.

Hence, the HSRC calls for the government to continue to prioritise R&D and monitor and evaluate

programmes that has to deliver on R & D outcomes.



The HSRC, furthermore placed emphasis on the need for research information to inform medium term

expenditure decisions, with concern being raised as to whether national data collection needs in the

areas of health and education are receiving sufficient allocations from national funding. The HSRC

proposes a new national health survey (i.e. South African National Health and Nutrition Examination

Survey [SANHANES]) that will provide real-time annual monitoring of the health status of the nation

and fill the current gap in national health surveys. Furthermore, proposes accessibility modelling (that

will identify access norms and standards, demand for services, service infrastructure supply etc.) and
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strategic use of Geographic Information Systems (GIS) capabilities for spatial optimisation of services,

resulting in improved service delivery.



The HSRC commends the acknowledgement in the MTBPS of procurement and tender fraud which is

currently under investigation and the efforts of the Inter-Ministerial Committee on Anti-Corruption in

its efforts to address inefficiencies in, and improving the effectiveness of public management. The

HSRC also proposes a closer examination of the nature and scope of service delivery protests to avoid

future conflicts with communities and facilitate implementation, given the imminent increases in

tariffs and user charges.



The Committees on Appropriations raised the following points of clarity in respect of the HSRC

submission:



      The HSRC’s recommendations for improving educational outcomes in light of the poor

       outcomes observed thus far;

      Whether the government HIV/Aids awareness programme has been effective in light of the

       prevalence of HIV infections continuing to remain high among women aged 25-29 years;

      Concerns were raised that the current status of Tuberculosis (TB) in South Africa was not

       mentioned in the HSRC presentation, as the prevalence of TB is quite high as well;

      What conditionalities could be attached to social welfare grants?

      What is the optimal percentage share of GDP that need to be invested in R&D activities?

      What comparative studies has the HSRC undertaken in relation to the economic growth

       potential of cities?
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The HSRC responded that government has been proactive by intervening in critical areas such as

curriculum and teacher/educator training to bring about positive outcomes. The HSRC indicated that it

would provide empirical evidence of factors affecting educational outcomes.



The HSRC explained that the prevalence indicator could be misleading as it does not reflect the

positive trends, such as the fact that HIV/Aids patients are living longer as a result of anti-retroviral

treatment and more people are becoming aware of their HIV/Aids status. Prevalence is measured

according to the number of new HIV incidents reported and the mortality rate of HIV infected people

or Aids patients. The HSRC indicated that in the Western Cape, TB forms part the Burden of Disease

Programme, whereby HIV/Aids and TB are diagnosed and treated together. This has resulted in cost

savings and improved diagnosis and treatment of HIV/Aids and TB. The HSRC were of the opinion

that the Western Cape model could possibly be implemented across the country.



The HSRC proposed the following conditionalities related to certain social welfare grants:

      School enrolment could be a conditionality attached to the child-support grant;

      Teenage mothers should either continue with their schooling or enrol in an FET institution in

       order to gain access to the child-support grant; and

      Conditionality in respect of the proposed youth employment grant could be that the individual

       should show proof of actively seeking for work in order to qualify for the grant.



The HRSC reported that R&D as percentage share of GDP has declined, despite government

committing to 1 per cent of GDP, Currently the R&D as percentage share of GDP is 0.93 per cent.

The HRSC recommends an optimal percentage share of 1.5 per cent of GDP.
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The HRSC reported that it forms part of a research group that is reviewing and assessing the socio-

economic status of cities. Findings are that the economic performance of cities have benefited the

country as a whole and have been the drivers of employment creation. On the other hand, it has placed

greater demand on cities infrastructure and service delivery, resulting in greater pressure on the cities

finances. Hence, the HRSC cautions the government and recommends a more balanced approach in

investment and the distribution of investment between rural and urban areas.



5.       Findings



          The Committee established that the 2010 MTBPS made more budget provision for the wage

           bill. Concerns were raised about the increase in the wage bill due to the higher inflationary

           wage settlement.



          Although Section 1(3) (1) of the Financial and Fiscal Commission Act (2003), as amended,

           provides for a Commission to act as a consultative body and make recommendations to organs

           of state in all spheres of government on financial and fiscal matters, the Financial and Fiscal

           Commission alluded, during the hearings on the 2010 MTBPS, to the fact that there has been a

           lack of consultation between the Department of Cooperative Governance and the Commission.



          The Committee established that there was a lack of expenditure on conditional grants which

           has led to a roll-over of R1.8 billion in the 2010/11 financial year. It is the view of the

           Committee that these grants are very instrumental in the infrastructure development and job

           creation and should therefore be spent appropriately.
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         The Committee established that technical and vocational education system is one of the areas

          which contribute towards economic development and job creation.



         The Committee established that there is a lack of consultation by government departments with

          regards to section 1(3)(1) of the Financial and Fiscal Commission Act.



5.       Committee Recommendations



The Standing Committee on Appropriations, having considered the 2010 Medium Term Budget Policy

Statement and heard comments from identified stakeholders, recommends the following:

         That the Department of Higher Education and Training should continue to improve quality

          levels of qualifications obtained at Further Education Technical institutions; and

         That the House adopts the 2010 Medium Tern Budget Policy Statement.



Report to be considered.



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