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                 BUDGET VOTE


                 24 MARCH 2006

           In support of The Age of Hope

Honourable Speaker
Madame Premier
Honourable Members of the Legislature
Honourable Mayors and Speakers
Marena le Dikgosi
Distinguished Guests.

Mr Speaker, in this esteemed house, announcements have been made of several
anniversaries which our nation will be celebrating this year. The importance of these
anniversaries cannot be over-emphasised. All of them, in their variety, serve to
remind us that our commitment to bring about “A better life for all” is shaped by the
commitments of those who went before us. We are revolutionary descendants of
those who revolted against deprivations visited on the overwhelming majority of our
country’s people.

Mr Speaker, as you are aware, we can now proudly report that the South African local
government elections were held successfully and were pronounced free, fair and
credible by the Independent Electoral Commission (IEC). We would like to thank
you honourable members of the house and many South Africans for the many varied
contributions that you have made towards a successful poll on 1st March 2006.

The people of the Free State have once more given a mandate to the African National
Congress (ANC), the party that has earned an unrivalled reputation as a vanguard of
the struggle for progressive change in South Africa. They know that it has now
become possible to insist on accelerated progress, with the distinct hope of being

Mr Speaker, I therefore pause to salute the outgoing Councillors who are a pioneer
generation of democratic local government leaders in our country. Their work, not
withstanding shortcomings, forms an indispensable bedrock for our future

The solid foundation they have laid, gives us and the incoming councillors, the self-
confidence to say that:

   No community will be using the bucket system by 2007
   All communities will have access to clean water and decent sanitation by 2010
   All communities will have access to electricity by 2012
   All informal settlements will be eradicated by 2014.

Mr. Speaker, I take this opportunity to congratulate all the newly elected Councillors
as well as Mayors and Speakers who are in this house today.

Mr. Speaker, the core business of my department is Developmental Local Governance
and Creation of Sustainable Human Settlements. Do allow me to reflect on the
department’s commitments of the past financial year.

Specifically, we had committed ourselves to do the following:

   Co-ordinate the effective implementation of the Municipal Infrastructure Grant
    (MIG) and evolve rigorous monitoring processes of monitoring MIG funded
   Develop and implement a support programme in partnership with district
    municipalities to enhance the quality of municipal Integrated Development Plans
   Intensify the implementation of Project Consolidate to build the capacity of the 12
    selected municipalities to deal with service delivery and institutional challenges
    that afflict these municipalities. Furthermore, we mobilised experts, facilitators
    and resources drawn from critical stakeholders to support selected municipalities.
   Train the remaining 205 Community Development Workers (CDW) learners and
    strengthen ward committees in partnership with the South African Local
    Government Association (SALGA).
   Work with Traditional Leadership Institutions to ensure that traditional
    communities are agents of socio-economic development for sustainable rural
    development, and
   Implement various housing programme to build 12 000 housing units


Mr Speaker, we are proud to announce the following as the highlights of our

Housing and human settlements

   9523 housing units were completed and handed over to respective households and
    2000 of these units were in rural areas of Qwaqwa and Thaba Nchu.

   7900 additional subsidies were allocated in December 2005 to further reduce
    housing backlog in the province with the intention to complete and transfer these
    housing units to beneficiaries by 31st March 2006. Due to recent rains however,
    this deadline had to be extended.

   We have started with the programme of issuing title deeds to various households
    in different local municipalities. We will be continuing with this programme in
    phases across the Province because Title Deeds are important documents
    confirming ownership and security of tenure.

   102 Municipal Infrastructure Grant and Provincial Infrastructure Grant
    infrastructure projects are under construction to benefit 918 379 households.

   10 Housing Sector Plans have been completed thus making the Free State the only
    province where all local municipalities have finalised these plans. These housing
    sector plans will be used to inform the Provincial Multi-Year Housing
    Development Plan.

   We have implemented a Provincial Turn-a-Round Strategy which focuses on:

       Improved comprehensive planning approach
       Pivotal role played by local municipalities in the housing delivery process

       Grading or ranking of contractors and assessment of professionals or
        consultants in terms of performance in housing delivery.
       Completion of incomplete housing projects. In September 2005, we launched
        a pilot project focusing on Xhariep District where 153 housing units have been
        constructed and others structurally corrected. Progress is more than 90%
        complete in this regard. On the 17th February 2006, the programme was
        extended to the Lejweleputswa where 340 incomplete houses will be finalised;
       Capacity building in all local municipalities, among beneficiaries and other
        stakeholders through programmes such as consumer education and emerging
        contractor support.

Project Consolidate

Our municipalities have completed a variety of infrastructure projects (water,
sanitation, roads, street/community lighting, etc) and as a result, communities and
households have benefited through services provided and temporal job opportunities

The Department has in partnership with the Development Bank of Southern Africa
(DBSA) and the State Information Technology Agency (SITA) supported selected
Project Consolidate municipalities in achieving the following:

   The development and subsequent endorsement of Master Systems Plans (MSPs)
    by six Project Consolidate municipalities - Moqhaka, Naledi, Phumelela, Nala,
    Tswelopele and Tokologo. MSPs are Information Technology strategies geared
    towards enhancing the ability of municipalities to discharge their core mandates
    and responsibilities by using technology to fast-track municipal processes that are
    critical for effective service delivery.
   Improved operations and maintenance of water and wastewater treatment plants at
    Moqhaka, Kopanong, Setsoto, Phumelela, Mohokare, Matjhabeng, Tokologo and
   Completion and implementation of short catalytic projects at Moqhaka, Maluti a
    Phofung, Phumelela and Tokologo municipalities for planning and surveying,
    installation of high-mast lights; upgrading of gravel road and storm-water and

    provision of bulk water supply respectively. All these projects to the exception of
    the bulk water supply project have been completed. The benefits to communities
    in these localities are the provision of water services within set standards,
    facilitating access and mobility of residents and providing additional surveyed
    areas where other service infrastructure would be installed.

   The deployment of water and sanitation technicians and an engineer at Phumelela,
    Naledi and Kopanong Local municipalities. The deployment of an engineer at
    Kopanong has been done in partnership with the Department of Water Affairs and
    Forestry (DWAF)

Building the capacity of municipalities to manage their finances

The Department has contributed to the improvement of municipal financial
management capacity through the Municipal Support Programme that entails the
deployment of municipal finance experts to municipalities to assist and guide with the
development of annual financial statements, finance related policies and updating of
municipal financial administration.

Municipal Infrastructure Grant (MIG) and the Provincial Infrastructure Fund

Through the MIG government has made an investment of R434.9 million for
facilitating the implementation of the mentioned 102 infrastructure projects in our
province to deal with massive infrastructure backlog (roads and storm-water, water,
sanitation, social amenities, street and community lighting). Importantly, R72.6
million of the total allocated amount was earmarked for eradicating the most abhorred
bucket system and thereby progressively restores the dignity of our people by
providing basic adequate sanitation

Together with the Council for Scientific and Industrial Research (CSIR), the
Department had continued auditing the quality of drinking and wastewater at the local
municipalities that are the Water Services Authority (WSAs).

Community Development Workers (CDW) and Ward Committee System

The training of CDW learners (a special cadre of public servants that would assist
government in forging links with communities and supplementing our efforts of
strengthening ward committee system) is gathering momentum. We have succeeded
in facilitating the training of 94 CDW learners who completed their experiential
training by August 2005 and had since worked in collaboration with municipalities
and other provincial sector departments in ensuring community participation in
government. An additional 184 CDW learners have been recruited and they started
their learnership on November 2005.

Facilitating effective planning for development

For the period under review, the department assessed and processed a variety of land
development applications. These processes are critical in ensuring orderly planning
for economic and human settlement development.

In partnership with the Department of the Premier, we have compiled the Provincial
Spatial Development Framework (SDF) to provide spatial expression to development
opportunities entailed in the Free State Growth and Development Strategy. Our SDF
guides the investment of government and its social partners on specific spatial
localities with the potential to maximise development.

We have supported municipalities to develop disaster management plans as sectoral
plans to the IDP.


Mr Speaker

Housing development faces various challenges and impediments, chief among these
are the following:

   Unavailability of township registers
   Unavailability of serviced sites and suitable land
   Lack of capacity on administrative matters (beneficiary management), project
    management, technical and financial matters regarding housing
   Lack of dedicated housing units and adequate staffing in some municipalities.

There is an emerging consensus in the country on challenges that face local
government. Informed by an organising framework that focuses on key performance
areas of local government, these challenges are:

       Institutional capacity and municipal transformation – core municipal
        systems not established or implemented, inadequate municipal management
        capacity and high vacancy levels, poor accountability mechanisms and
        challenges in areas of financial management, programme management,
        engineering and organisational development.

       Basic service delivery and infrastructure – slow pace, poor quality of
        services delivered, water supply as well as sanitation and housing backlogs
        emerge as the most critical challenges.

       Local Economic Development – high level of poverty due to unemployment,
        poor quality LED plans and scarcity of municipal LED specialists

       Financial viability and management – inadequate billing, debt management
        and credit control systems, poor municipal financial management capacity and
        systems, low revenue base due to high levels of indigence; and

       Good governance – instability within and between political and
        administrative domains, poor communication between council and
        communities and non functioning ward committees

Our approach to implementation

Mr Speaker, in dealing with these challenges, our approach will be informed by the

   An implementation approach and three overarching strategic priorities for this
    term of local government as approved by Cabinet; and
   The Breaking New Ground (BNG) strategy as outlined by the Ministry of Housing

The three strategic priorities to guide our work in this term of local government
(2006-2011) are:

   Mainstreaming hands-on support to local government to improve municipal
    governance, performance and accountability
   Addressing the structure and governance arrangements of the state to better
    strengthen, support and monitor local government.
   Refining and strengthening enforcement measures of the policy, legislative and
    fiscal environment for local government.

Importantly, priority actions will be implemented in an integrated manner by all
spheres of government and social partners aligned to the Free State Growth and
Development Strategy priorities.

Our plan for Local Government and Housing


Mr Speaker, we will expend efforts in accelerating the implementation of BNG to
evolve integrated sustainable human settlement and enhancing the capacity of

municipalities through facilitating the provision of hands- on- support to
municipalities for easy implementation as follows:

Facilitate the provision of Social and Economic Amenities Programme that is
intended to be commenced with the identification and prioritisation process with
various local municipalities, provincial departments, national departments, State
Owned-Enterprises (SOEs), SALGA Free State and relevant Non-Government
Organisations (NGOs).

Accreditation of Local Municipalities Programme has already started with the
Mangaung Local Municipality identified as the priority local municipality in the
Province. Presently, the Department and Mangaung Local Municipality are engaged
in creating conducive environment for effective and sustainable implementation of the
accreditation process. Other local municipalities will simultaneously be engaged in
capacitation programmes for subsequent accreditation. Partnerships will be entered
into with relevant stakeholders to resource and sustain the momentum with an
ultimate aim of “crowding in” resources to create the critical mass of local
municipalities’ empowerment in respect of housing and human settlement scope of

Enhanced Extended Discount Benefit Scheme (EEDBS) will be implemented to
provide tenure to occupants of pre-1994 housing stock. Deserving beneficiaries will
have these units transferred to their names after the normalisation and regularisation
processes have been undertaken.

Post-94 housing correction of defects programme – seeks to correct the defect of
housing unit built through the housing subsidy scheme covering the period between
01 April 1995 to 31 March 2002.

Farm Worker Housing Programme will be implemented through a pilot project
from which lessons will be drawn to upscale the Programme for wholesale
implementation. Information regarding the pilot site will be communicated soon.

Social Housing and Medium Density Programmes will be commenced in
partnership with Mangaung Local Municipality where we are allocating 315 housing
units. which will start with the assistance and partnership of the National Housing
Finance (NHFC), Social Housing Foundation (SHF) and the banking sector.

Acquisition of suitable Land Programme will be undertaken by the Department in
collaboration with a Special Purpose Vehicle (S.P.V.) established by the Minister of
Housing to acquire suitable land for housing development and deal with inherited
spatial distortions.

Land Restitution Programme - in partnership with the Land Claims Commission,
we will be providing Housing for Restitution Programme beneficiaries. Our focus will
be on the following cases in Moqhaka, Kroonstad (Marantha) and Maluti-a-Phofung,
Harrismith (Schoonplaatz).

Informal Settlement Upgrading Programme, the department will conduct an audit
of all shacks in the province in collaboration with municipalities and compile a report
by June 2006. We are working on resolving impediments on land development
processes to ensure the effective implementation of the Grassland Pilot Project on
Informal Settlement Upgrading.

Spatial Integration and Urban Restructuring Programme – in partnership with
Matjhabeng Local Municipality, we will identity a project to pilot this programme.

We are happy to announce that the Housing Panel of Advisors is now in place whose
members will be introduced later this evening.

We will be launching the Rental Housing Tribunal by July 2006 in order to effectively
regulate relations between landlords and tenants.

We will improve on quality of housing products by actively engaging the National
Home Building Regulating Council (NHBRC) in our housing construction and
improve on specifications of the department.

In the spirit of Social Contract for Rapid Housing Delivery, the Department will
continuously engage and mobilize relevant stakeholders to take part in the delivery
processes including municipalities and Housing Institutions.

We will be spending R522 million for this financial year and are happy to announce
that we will be allocating 12, 000 housing units using a variety of housing
programmes to build houses. During the course of April 2006, we will advertise
housing tenders.

In celebrating various anniversaries of our liberation struggles, we will be allocating
ring-fenced housing units as follows:

   In acknowledging 30 years of June 16 uprising, we will allocate 500 housing
    subsidies to construction companies owned and led by Youth.

   In acknowledging 50 years of Women’s march to Pretoria in August 1956, we will
    allocate 1,000 housing units to women led construction companies that have not
    benefited in the past.

   For 16 Days of Activism against Abuse of Women and Children, we will build 32
    housing units.

Providing hands-on-support to municipalities

In preparation for the National Cabinet Lekgotla of July 2006 and working together
with the Department of the Premier, we will solicit Provincial Departments’ support
to municipalities.

Mr Speaker, we will be mainstreaming hands-on support to local government to
improve municipal governance, performance and accountability. As indicated this is a
clarion call to all of us – provincial sectoral departments, national departments, state
agencies and government social partners to work together with local government in
tackling service delivery challenges.

In partnership with the Independent Development Trust (IDT), we will strengthen
provincial and district Programme Management Units.

Furthermore, we will solidify our partnership with the Development Bank of Southern
Africa (DBSA) in ensuring that government latest initiative of deploying engineers
and seasoned project managers called Senza Manje “ we are doing now” led by the
bank is successful. We are engaging DBSA on modalities of working together on this

Strategically, emphasis will be placed on eradicating the bucket system and together
with the regional office of the Department of Water Affairs and Forestry (DWAF); we
will ensure expeditious and effective use of allocated resources.

We will be facilitating capacity building and leadership development programmes for
newly elected municipal leaders and administrative leadership in partnership with

Through Project Consolidate, we will mobilise resources from critical stakeholders,
departments, and state agencies to support municipalities in discharging their
mandates. The recent pronouncements of Cabinet, obligating all government
departments to support our efforts of supporting all municipalities and making
budgetary provision in their voted funds and strategic plans is a welcomed
development. To this end, we will be developing a Provincial Action Plan by 30 April
2006 that entail concrete actions of all provincial sectoral departments in providing
support and resources to local government;

Mr Speaker we have finalised the internal processes for restructuring the Department
to strengthen our capacity to deliver on our mandate to support municipalities.

(Optimising infrastructure investment)

We will be working with our colleagues in Public Works, Roads and Transport,
Treasury and Education in ensuring that we derive better mileage in our collective

investment in infrastructure and follow through decisions taken at the Infrastructure
Summit last year.
We will be expending efforts in supporting the initiatives of municipalities to promote
local economic development by maximising economic development potential in their
localities. A capacity building programme will be implemented to assist
municipalities in developing LED strategies and implementation plans aligned to
economic development strategies articulated in FSGDS.

Our LED initiative will be aimed at supporting the implementation of the Accelerated
and Shared Growth Initiatives of South Africa (ASGISA) with district municipalities,
aligned to Spatial Development Framework.


We will be overseeing the training of 184 CDW learners currently undergoing the
CDW learnership and lay a solid foundation for post-training employment
opportunities by engaging municipalities and other sectoral departments. The
responsibility of CDW vests with all of us. As indicated 94 CDW soon to be absorbed
by the department will be used in strengthening ward committees and forging of a link
between government and communities.

We will be supporting municipalities in implementing PMS in partnership with
SALGA and dplg. Importantly, we will develop a generic performance contract by 30
May 2006 and facilitate the process for all municipalities to re-negotiate their
municipal managers’ contract by 01 July 2006.

We will be hosting a provincial VUNA awards event where service delivery
achievements attained by municipalities will be celebrated and documented.

We will strengthen and rationalise development-planning processes across
government to focus on the planning capacity at municipal level. Critically, we will
actively participate in the IDPs assessment programme and corresponding
engagement plan to be undertaken between April and June 2006.

Mr Speaker, we will facilitate the implementation of Inter-Governmental Relations
Act by working with district municipalities and SALGA in facilitating the
establishment of institutional arrangements for implementing the Act. Emphasis will
be placed on fostering partnerships for development with municipalities for
developing agreements on core municipal processes and programmes such as
planning, PMS, LED, CDW, MIG, Disaster Management, traditional leadership,
municipal finances and capacity building initiatives;

We will champion the legislation to implement the national Framework legislation on
the Institution of Traditional Leadership, repeal and establish Local Houses. We will
continue to support the work of the National Commission on Traditional Leadership.


Regarding disaster management, we will be developing disaster management
framework, nurturing related institutional structures and evolving disaster prevention

Mr Speaker

I want to conclude by presenting to this house the words of Martin Luther King, Jr
(One question: one answer)

“Cowardice asks the question – is it safe?
Expediency asks the question – is it politic?
Vanity asks the question – is it popular?
But conscience asks the question – is it right?

And there comes a time when one must take a position that is neither safe, nor
politic, nor popular, but one must take it because it is right”

Let me take this opportunity to thank you the Speaker, the Premier, my colleagues in
the Executive Council, the Chairperson and Members of the Portfolio Committee on

Local Government and Housing, and Members of the Legislature for their guidance
and support.

Allow me to take this opportunity to thank my Head of the Department, Kopung
Ralikontsane and the staff for their support and commitment to implement our

I therefore present my department’s budget vote as reflected in Annexure A.

Lastly, Mr Speaker, allow me to thank my wife Tshidi and the family for their
unwavering support.

Ke a leboha

                                  ANNEXURE A

                        BUDGET ALLOCATION 2006/07

The total amount appropriated for the 2006/07 financial year for the Department
Local Government and Housing amounts to R 718 062 000 which includes the
Housing Grant to the amount of R 522 601 000. The total amount appropriated can be
summarised as follows:

               Programme                           Amount         Percentage of Budget
Administration                                      57 273 000             8%
Housing Administration                             574 531 000            80%
Local Government Administration                     86 258 000            12%

          Economic classification                  Amount         Percentage of Budget
Compensation of Employees                           88 781 000            12%
Goods and Services                                  68 848 000            10%
Transfers and Subsidies                            552 676 000            77%
Capital Assets                                       7 757 000             1%

The main elements in regard to the appropriation in regard to Transfers and Subsidies

        Transfers and Subsidies                  Amount            Percentage of
Provinces and Municipalities:                     27 576 000            5%
   Municipal Infrastructure  17 744
   Planning and Surveying     6 731
   Integrated Development
    and Planning              3 101
Universities and Technikons                        1 100 000             0.2%
Non-Profit Institutions                              824 000            0.15%
Households                                       523 176 000           94.65%


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