Department's Budget; Traditional Leaders Amendment Bill: discussion

Meeting report

PROVINCIAL AND LOCAL GOVERNMENT PORTFOLIO COMMITTEE
4 April 2000
BUDGET VOTE; TRADITIONAL LEADERS AMENDMENT BILL

Relevant Documents:
Department’s Budget presentation
National House of Traditional Leaders Amendment Bill
Remuneration of Public Office Bearers Second Amendment Bill

SUMMARY
A delegation from the Committee to be sent to Australia was discussed.  Representatives from the Department, including the Director General, addressed a number the Committee’s outstanding questions relating to the budget vote and to the “equitable share”.  Ms G Moloi of the Chief Directorate (Municipal Infrastructure and Planning) delivered a presentation after which there was a discussion, including the issue of disaster management.  The National House of Traditional Leaders Bill and Remuneration of Public Office Bearers Second Amendment Bill were briefly discussed.

MINUTES
Announcements: Budget Vote; Australian and Spanish Committee Tours
The Chair, Mr Y Carrim (ANC), noted that the budget vote discussions should be finished by the end of April.  He stated that the vote was initially scheduled for 11 April, but following representations the date has been moved to 7 June.

There has been negotiation with funders for a delegation to be sent to Australia to look at issues such as performance planning.  The money for this has come from external sources and not from Parliament and therefore Parliamentary rules regarding the composition of such a delegation do not need to be followed.  Consequently, there will be a multi-party delegation.  The Chair stated that this delegation would comprise three ANC members, and one member each from the DP and IFP.  The Chair noted that the choice of members for the delegation will be negotiated and that the delegation would be sent in mid-May.

Thirdly, representations have been made to Parliament regarding a proposed visit to Spain to look into inter-governmental relations.  There is an attempt to obtain funding from Parliament.  This would provide an opportunity for parties who are not going to Australia to be represented in this delegation.  The Chair stated that those parties who are not going to Australia could approach him regarding the delegation to Spain.

Ms R Southgate (ACDP) questioned the formula used in deciding who should comprise the delegations.

The Chair responded that the composition of the delegation to Australia was not open for negotiation.  He stated that there were other matters that could be negotiated such as the composition of the delegation to Spain.

Ms Southgate asked from where the funding for the delegation to Australia had come.

The Chair responded that it had come from NDI.  He stated that he had decided upon the composition of the delegation to Australia.  He repeated that this was non-negotiable.  He stated that the initial proposal from the funders was that ANC members only should go and that he had gone out of his way to secure an opportunity for members from other parties to go.

Ms M Verwoerd (ANC) remarked that Ms Southgate’s objections were out of order and proposed that the matter should not come up for discussion again.

Ms Southgate commented that it was not fair of the Chair to have made the announcement and then not to have permitted a discussion.

There was further heated debate.  The Chair emphasised that the funding to be used for the delegation was not parliamentary funding.  He stated that he did not believe that he could have been more consultative regarding who should go.  He stated that Ms Southgate would be given fourteen days to return to the Committee with a justification for her earlier allegation that the Chair’s conduct constituted an abuse of power. The Chair urged that the Committee deal with the issues at hand.

Budget Report of Department
The Director General, Mr Zam Titus, stated that the members were in possession of the budget report and that he would take it as having been read.  He stated that he would take questions regarding the report and on outstanding issues.

The Chair suggested that the specific questions that had already been formulated by the Committee be dealt with.

The Acting Deputy Director General, Ms J Manche, noted that the bulk of the questions related to the “equitable share” of revenue to which local governments are entitled in terms of the Constitution.  She stated that the Minister would present an annual report within the following few weeks that would answer these questions and would set out the budgetary allocations for each municipality.

She stated that the formula that the department applies is a horizontal formula for the allocation of money to municipalities.  She stated that the formula has two parts: an “I” grant and an “S” grant.  The “I” grant provides money for municipalities who lack administrative capacity while the “S” fund is for the rendering of services.  She stated that the funds required money in order to fulfil the roles set out in the Constitution.

She stated that there are two driving forces behind the allocation of funding to municipalities.  The first is the number of people in the municipality and the second is the number of people in the municipality who are poor i.e. earning less than R800 per month.

She stated that Cabinet operates on a vertical division.  The Minister of finance acts in consultation with Cabinet and receives representations throughout the year.  The Budget Council and Budget Forum constitute the process by which the Minister of Finance consults with the provinces.  The forums inform the decision-making at Cabinet.

Ms Manche turned to the question of how the process could be improved.  She noted that the Minister had been informed that there is insufficient consultation with local government and the question was how local government could be involved in the Budget Council.

She noted that the Department has undertaken a study regarding the equitable share.  The study investigated what the allocation to local government should be in terms of its role as local government.  The results of the study are expected in September.  The horizontal allocation formula will also be looked at.

Ms Manche raised the question of the extent to which the equitable share is conditional.  According to the Constitution, the allocation of an equitable share is unconditional and therefore conditions could not be placed on the utilisation of funds.  The only distinction that can be made is that grants cannot be used for capital expenditure.  They can only be used for operating costs.

She noted that the Department is improving its collection of data.  A project viability questionnaire has been developed in order to find out how the provinces are using their money.

Ms Verwoerd noted that the vertical division is something the Committee had not yet come to grips with.  She stated that in her experience with the equitable share, she had heard stories of people’s electricity and water being cut off and municipalities auctioning houses when sums as little as R500 had not been paid.  She noted that many of these people are unemployed and single mothers.  She stated that the current threshold of R800 is too little.

Mr P Smith (IFP) asked whether the R800 was calculated per household or per individual.  The chair responded that it was calculated per household.  Mr Smith requested clarity about the “phasing in” of the equitable share and questioned the rural/urban distinction.

The Chair raised the issue of “I” grants.  These are provided where municipalities have insufficient administrative capacity.  He remarked that this is where the loophole is.  Money is being used to pay cell-phone bills under the guise of improving administrative capacity.

Ms Manche clarified that the R800 level is used by the Department to determine the allocation of money to municipalities.  Once the money is in the municipality’s account, the municipality has the discretion as to how it is spent.  The transfer to the municipality is unconditional and how it should be spent cannot be dictated.  She confirmed that the R800 referred to income per household.  She repeated that how many people live in a municipality is the other factor in determining the equitable share.

Regarding the phasing in of the equitable share, Ms Manche stated that it was being phased in to avoid a shock to the system and that there was a recognition of a number of different absorption factors.  She noted that as local government was being restructured, restructuring of finances should also occur.

Mr Smith asked how the Department would know how money is spent and whether it is being used to pay cell-phone bills.  Ms Manche responded that the only way of knowing was through project reports.

The Director General noted that municipalities face a number of challenges and remarked (directed at the media) that municipalities needed to be treated fairly regarding the use of the equitable share.

The Chair requested that the Committee move on to other issues.  He noted that there was a question regarding whether the money allocated to the Disaster Management Centre was sufficient.

The Department responded that this was not an easy question.  He stated that there was enough money for policy implementation measures.  However, it was noted that there is the perception that the Disaster Management Centre is always in a position to provide urgent relief, but this is not the case.  It was noted that what is expected of the centre is very high and that the Centre could not live up to these expectations.

The Chair asked how capacity-building is monitored.  Ms Manche responded that it is monitored at a local level.  She stated that a full report on the capacity-building programme is required to determine how it can be continued.

Mr R Sizani of the Department added that there are programmes on a provincial level, but that there is no national capacity-building programme that affects the provinces.  He stated that the Department is going to conduct a review of the programmes to establish where the gaps are and which aspects have been successful.

The National Commission investigating the legitimacy of traditional leaders was discussed.  It has been established which leaders are involved in disputes and that a genealogical audit of claims is required.  The traditional leaders have suggested that independent people should be involved in investigating these issues.  The Chair raised the question of whether it should be the Committee who makes the final decisions here and stated that there is an attempt to look at all the possibilities.

The Chair noted that the current laws needed to be looked at and noted that much of it, particularly elements of customary law, may be contrary to the Constitution. It was noted that a policy framework is being developed.

Mr Sizani noted that a programme was being developed to rationalise the laws.  He noted that capacity-building in the context of traditional leaders has been dealt with by the provinces in the past.  However, the provinces have, for example, been paying traditional leaders different amounts and there is a need to bring about uniformity.  The Constitution provides that this is an area of concurrent jurisdiction and that since the Department of Provincial and Local Government is concerned with the structure of government, it should be the relevant department to deal with this.

He stated that the development of traditional leaders is also of interest to the presidency and that, in the context of co-operative government, the Department is acting as an agent of the presidency.

The Director General noted that a number of the questions that had been asked had not been related to the budget and that some had been related to the oversight role of MPs.  He stated that there was a pressing need to develop a programme for the year.  He stated that there was being done at local and provincial levels and that, in respect of capacity-building, provincial DGs are putting together a report concerning initiatives in this regard.

The Chair noted that it had been discussed previously that a workshop should be held and that it had already been agreed that all the parties should be brought together to discuss the issue of capacity-building.  He noted that it was necessary to provide MPs with skills regarding the analysis of budgets.

Presentation by Ms Gugu Moloi, Chief Director in the Department, on Municipal Infrastructure and Planning
Ms Moloi brought to the members’ attention the recommendations the Committee had made the previous year.  These included the view that the money allocated to Consolidated Municipal Infrastructure Programme (CMIP) was insufficient, that the urban bias needed to be reversed and that support was needed for public-private partnerships in the municipalities.  She stated that much of this had been achieved.

Consolidated Municipal Infrastructure Programme (CMIP)
Ms Moloi stated that 500 programmes have been implemented on the ground, funding has been allocated and programmes were now more relevant to rural areas.

Regarding the plans for the CMIP for the forthcoming year, Ms Moloi noted that 2000/2001 would be used as pilot year for the rural component of the programme.  One of the strategic areas is to work on intergovernmental relationships regarding delivery.  There exists a large gap between municipal and national government and much thought is required here. The Municipal Infrastructure Investment Framework (MIIF) has been reviewed and that the outcomes of this review are to be addressed.  She stated that a more robust monitoring and evaluation function was being developed and that a structured capacity-building programme on infrastructure is to be undertaken.

Local Economic Development Programme (LED)
This is a new programme and that money for the programme was received late in 1999.  She noted that a management directorate has been established in the Department to administer these funds and that guidelines had been produced in 1999.  So far 47 projects have been approved and teams are to go out to meet with municipalities.

Regarding plans for the next year, the driving force is the finalisation of a policy framework and national policy guidelines are required.  Additional funding is required and R300 million has been requested for the next three years.  Other plans include working closely with other departments to enhance the impact of LED, consolidating the work of the provincial teams and providing guidance to municipalities on LED.

Social Plan Programme (SPP)
Ms Moloi briefly addressed this programme.  She noted that the programme had been created under an agreement reached at the Job Summit in 1998.  The Labour Department was responsible for a number of issues here.  Funding has been received and the Department has approved projects to the value of over R2 million.

Integrated Development Planning Programme (IDP)
Ms Moloi noted that this programme requires strong leadership.  The IDP pilots have been completed, quarterly newsletters have been sent to municipalities (these newsletters have sometimes provided incentives) and an IDP manual has been produced.

Regarding plans for the forthcoming year, Ms Moloi noted that the year would be a sensitive one, as local government elections would be taking place.  There is a need to implement a support programme to assist new district councils and a sustainable system of planning must be promoted.

Municipal Service Partnership Programme (MSP)
The achievements here include the production of a draft white paper and providing strategic direction to the Municipal Infrastructure Investment Unit (MIIU) regarding government policy

Plans for the programme include producing guidelines on elements of the MSP process, consolidating partnership programmes and setting up a support unit.

Areas of Strategic Focus
Ms Moloi concluded her presentation by highlighting the key areas of strategic focus.  These include the IDP grant and the development of the programme as part of the department’s budget.  With regard to infrastructure, areas of focus include the extent to which backlogs are being met and the need for an intergovernmental strategic plan.  The review of policy regarding the MIIF and resources to support rural infrastructure are also areas of focus here.

Regarding MSPs, policy refinement and further support for the MIIU is the focus.  A governmental approach to dealing with job losses in the short and long term is the focus in terms of the Social Plan.  As a national team, there must be demonstration of concern over job losses and economic decline.  Regarding the Local Economic Development Programme, The focus is on securing further funding and support for the 2001/2002 budget.  Ms Moloi emphasised that there must be real empowerment of the people on the ground.

Discussion
Mr Smith asked how the extent to which backlogs have been addressed could be assessed and whether targets were being met.

Ms Southgate asked how many pilot projects are up and running.  Chief  N Mtirara (UDM) asked what was meant by “rural municipalities”.  Rev A Goosen (ANC) remarked that the municipalities must be aware that the goals will not be achieved over night and that a short term and a long term programme is required.  Mr M Ngubeni (ANC) stated that he was interested in the intergovernmental plan regarding infrastructure.  He asked how the Department was linking up with other departments and with people concerned with rural development, particularly the Deputy President’s office.  He questioned the extent of community participation and remarked that although community participation is always mentioned, he has not seen communities being brought on board.

The Director General commented that while Ms Moloi’s presentation was comprehensive, it did not cover the President’s notion of integration.  He questioned whether the LED Programme is an integrated programme.  He stated that a report has been developed and that this should be made available to the Committee.

Ms Moloi responded that backlogs were a far way from being met.  She stated that there was a movement towards a single municipal infrastructure programme of government.  At the moment each province has its own plan to address backlogs.  Regarding the LED programme, she noted the figure of 13 000 jobs is what is envisaged in the plan put forward by the department.  She stated that municipalities must be assisted in reaching these targets.  She stated that 21 pilot projects have so far been undertaken.

Regarding what is meant by “rural municipality”, Ms Moloi indicated that this refers, probably incorrectly, broadly to district councils.  She conceded that the lack of involvement of traditional leaders is an area of weakness.  She addressed the Director General's question regarding integration.  She stated that integration is a long-term measure but that it needs to be driven and the Department must be involved in driving it.  She stated that the Minister bears the primary responsibility here.

She stated that will be an interdepartmental task team.  She stated that while the Department provides other departments with plans, the other departments do not inform the Department of what they are doing.  There must be communication with the heads of these departments.

Regarding community participation, she stated that as a national directorate, there has been an attempt to go on site quarterly to determine whether communities were being brought on board.  There is an attempt to develop a dynamic relationship with the community.

The Chair remarked that he was interested to know about public-private partnerships.  He stated that, at the end of the day, there are many issues hanging in the air.  The Director General noted, in relation to partnerships, that a policy document is to be released soon and at that point a formal meeting could be arranged in this regard.

The Department addressed disaster management.  It was noted that since January this year there have been disasters on an unprecedented level.  There has been difficulty coping, with stresses on funding and reserves.  Cabinet has established three municipal committees and a technical task team has assessed the damage.  Under the leadership of Deputy Minister Sisulu of Home Affairs), the team has estimated that the damage amounts to R2.2 billion.

On the previous Friday there had been an informal meeting with the Mozambican consulate regarding the new tropical cyclone.  It was noted that there is irony in the fact that there are advanced warnings but little can be done.  It was also noted that there is a close relationship with the SADC bodies and that co-ordinating mechanisms for the region were being looked at.  It was pointed out that the updating of computer systems in anticipation of the Y2K bug has lead to an increase in capacity.  It was remarked that the Department would give the utmost support to disaster management facilities in the provinces, that capacity-building exercises were being carried out and that the new Bill will open a new chapter in disaster management.

The Director General suggested, regarding debates in the house that, because the matter of disaster management was being dealt with at Cabinet level, a that is not preceded by a comprehensive report would not realise its full effect.  In relation to an earlier question of funding, he noted that in view of the structure provided by the Constitution, local, provincial and national government have to budget for disasters.  The welfare budgets at provincial and national level should cater for disasters and there has been a decision by government that once there has been a disaster, it is the responsibility of the provinces to undertake infrastructure repairs – there should be re-prioritising and requests for money.

The Director General remarked that the National Relief fund has not been established as an “add-on” to the government budget.  Instead, the fund was set up because people wanted to contribute to a specific purpose and did not want the money to go into the state coffer.  He stated that it is not the state’s money; it is in a foundation and it is up to the foundation to determine how the funds are to be used.  There is the Contingency Reserve Fund, which is controlled by the minister of Finance, and money can be released in times of disaster.  There is also the Premiers’ Discretionary Fund.

The Director General noted that there are special funds that have been set aside for Mozambique and that there had been a decision to give Mozambique special treatment.  In relation to the disasters in South Africa, he noted that the Minister of Finance is currently working on finance for reconstruction programmes in five of the provinces.

Regarding the intention that local, provincial and national government should budget for disasters, Mr Smith asked whether they have “sinking funds” to cater for disasters.  He asked whether any of these have been established.  He asked whether it was not national government’s role to fund the reconstruction of, for example, roads.  He also asked about provision for consequential damage, for example, malaria after flooding.

A question was asked regarding how the technical task team will deal with the disasters that have been experienced.  It was also asked whether there was no way to empower communities to detect early warning signals, how warnings are communicated and whether schools could be used to provide human resources.

Ms Southgate asked how the provinces that receive funding are identified.  Ms G Borman (DP) asked what criteria are used to determine whether an area is a disaster area in order to release funds.  She commented that local governments are stretched financially and do not have the money to put into “sinking” or saving funds.

Rev A Goosen pointed out that a consequence of the floods was the loss of jobs and that many farms had been put out of action.  He asked how disaster relief assists these people.

The Director General remarked that the figure of R2 billion damage was an estimate and that there are a number of estimated figures emanating from various sources.  Regarding the “sinking funds”, he stated that there were no such existing funds at provincial level.  However, provinces budget for maintenance and repairing damage to infrastructure should be included here.  He explained that when there is a disaster, the Premier opens an account into which money is put.  Once the rehabilitation has occurred the account is closed.  He stated that it is difficult for the national government to do this and that it is able to occur at a provincial level as a result of old provincial ordinances.  He stated that as far as the future is concerned, statutory funds are intended.

He stated that there needs to be a culture of ownership in the context of damage repairs and that the owner of the asset bears the primary responsibility for repairs.  However, the Cabinet’s principles are that provinces are to assist local government and national government is to assist provincial government so that the responsibility is shared to an extent.

Regarding the consequential damage, the Director General noted that disease was a national health problem and therefore fell primarily within the responsibility of the Department of Health.  He stated that the health ministers from the SADC region are working together.

The Director General turned to the question of the technical task team.  He stated that there were two teams: one is political (headed by Deputy Minister Sisulu of Home Affairs), and the other is technical (headed by General Ferreira from the army).  The composition of the technical team will enable it do address any type of disaster.

Regarding early warning system, each province has a disaster management component (some of which are understaffed) and there are links between these components, the provincial departments and the security forces.  There are broadcasts of anticipated disasters and in the past there have been attempts to distribute pamphlets from the air.

The Director General commented that provinces often go ahead with relief programmes without seeking help from national government.  Regarding the declaration of areas as disaster areas, the Director General stated that the provinces ask for a declaration and to date the national government has not refused a request.  He stated that local governments do not really have the funding to cope with disasters but that they do have a responsibility for warnings and to deal with fires.

Regarding the loss of employment as a result of disasters, the Director General noted that the Minister has approached the Land Bank and that an Emergency Reconstruction Committee is looking at the economic effect of the disasters.

The Chair noted that a subcommittee should visit a disaster management centre. He remarked that the Department could only do so much and that there should be public support.

In dealing with the report of the Portfolio Committee to Parliament, the Chair stated that the practice has been for the Chair to draft the report with the support of the members and it is given to the party leaders.  The parties then come back to the chair with their views.  Because there may be dissenting opinions from the parties, in the report it stated that “the majority of the Committee…”.  He stated that new members should consult the parliamentary rules in this regard and noted that the report is really a political document.

National House of Traditional Leaders Amendment Bill
The Chair asked that the Bill be voted on on Friday so that it could be off the Committee’s chest.  The Director General thanked the Committee for the manner in which the budget discussions had been conducted and then proceeded to brief the committee on the Bill.

Clause 1 of the Bill gives the House of Traditional Leaders the power to remove their Chair or Deputy Chair.  However, the House must provide reasons in accordance with the procedures of natural justice.

Clause 2 of the Bill amends Section 13 of the principal Act.  In the principal Act, members of the House are not accorded the status of full-time members.  It is felt that it has become necessary for the Chair and Deputy Chair to be full-time members.

Clause 3 provides new terminology owing to the restructuring of the Department and Ministry.

Discussion
It was asked that there be clarity in the statute regarding the circumstances under which the Chair or Deputy Chair may be removed.  There was a suggestion that circumstances be mentioned, for example, where there has been corruption.  At the Bill stands there is no requirement that there be reasonable reasons for the removal of the Chair or Deputy Chair.

Mr Smith noted that the Memorandum to the Bill stated that the House has been consulted.  He asked whether the House has approved the Bill.  Regarding the terminology used to refer to the Minister, he urged that there be consistency in all legislation.  Legislation should refer either to “the Minister of…” or to “the Minister responsible for…”

The Chair raised the issue of the Chair or Deputy Chair having a deliberative vote as well as a casting vote (Clause 1(a)).  While he did not feel very strongly about the issue, he asked whether it was necessary to provide for both a deliberative and a casting vote.  Motivating against a deliberative vote, he noted that the interests of the Chair as a national chair might not be consistent with the provincial interests of the members of the House.

Regarding the removal of the Chair or Deputy Chair, he noted that he had been advised that the right of administrative justice applies here and questioned whether what is set out in the Constitution should be repeated in the Bill.  He expressed the view that this was not necessary.  He repeated Mr Smith’s question regarding whether the national house had approved the Bill.

Mr Sizani confirmed that the House had approved the Bill.  Mr Smith expressed doubts that the action of the house in removing the Chair or Deputy Chair, being political action, could be regarded as an administrative act attracting the right to administrative justice.

The chair pointed out that while the Chair or Deputy Chair may be full time members of the national house, they could still be part-time members of the relevant Provincial Houses.

The Committee looked briefly at the Remuneration of Public Office Bearers Second Amendment Bill.  The question of whether this was a s 75 or s 76 Bill was raised.  The Bill will be discussed further at the next meeting.

The chair concluded by noting that the Committee would meet on Friday.