Department of Tourism Budget: Committee Report

Meeting report

Report of the Portfolio Committee on Tourism for Budget Vote No. 38: Tourism

Dr Sibusiso Khuzwayo, Committee Content Advisor, presented the report on Budget Vote No. 38, which focused on the ministry's key areas of work and strategic priorities for the fiscal year 2023/24. He said the budget would detail milestones in the tourism sector recovery plan and the Department of Tourism's efforts to revitalise tourism and drive industry transformation and skills development.

The report listed seven priorities for the year which included building a capable, ethical and developmental state, and economic transformation and job creation.

The overall budget allocation to the Department of R2 524.2 billion for 2023/24 had increased by 0.87% when compared to the budget of R2 502.4 billion for 2022/23. An amount of R585.7 million had already been transferred to South African Tourism (SAT) on 3 May. This should be noted against the recommendation of the Committee that no more transfers must be made to the entity until the conditions set by the Committee have been met.

Read full report here https://pmg.org.za/tabled-committee-report/5367/

Discussion

The Chairperson commented that it was rather funny that the two people mentioned in the report had been in the entity because of white pre-eminence. She was bothered by that a lot because many unqualified people occupied senior positions just because they were white. She said this was unacceptable and unfair.

She referred to the page where the exact monetary value of money not spent had been indicated. She asked that it be said that the Minister, Ms Patricia de Lille, had not been honest about the withdrawal of delegations of authorities. The Chairperson said she had not received any letter of withdrawal. The Chairperson said she had it on authority that the 5th was the day that delegation of powers was taken away from several authorities from the entity in question. The Chairperson said that the Minister was guilty of perjury, as everything said in the Committee was under oath.

The Chairperson referred to the budget vote report and agreed there was no value for money regarding the infrastructure. It must be explicitly said that R37 million had been spent for nothing and was “gone with the wind,” because the facilities meant to have been improved were dilapidated.

Ms M Gomba (ANC) suggested that the Committee include important issues like the bribery allegations by the acting chairperson of SA Tourism. She asked that the Committee discuss three board members who still needed to be investigated for their roles in their companies and the board they currently served - this represented a conflict of interest.

Ms L Makhubela-Mashele (ANC) said that the Budget Vote Report was inconclusive on the matter of the budget and the Committee’s approval. A recommendation had been made in the report that the process be halted until certain requirements were met. She asked what the process would be like to have the budget accepted, considering that the National Assembly and National Council of Provinces (NCOP) had different processes.

She asked if it would not be proper for the Committee to approve the budget on condition that the Department holds the 53% transfer until the board gets appointed. She commented that the Director-General had not been forthcoming on why he was unable to delegate a person to the board when it was not even required by the Minister to write to the Department. The Director-General was responsible for appointing someone to ensure they were the ears and eyes of the Department as soon as the interim board was elected. This indicated that the budget could be appropriated, and certain requirements would not be considered.

She said that the manner in which the Budget Vote was presented was ambiguous, making it hard for Committee Members to understand the recommendations. She asked for clarification and for more information on what would happen when the budget gets approved. Clarification would ensure that there was no confusion among the Members.

Mr M De Freitas (DA) thanked Dr Khuzwayo for drafting and presenting a comprehensive report to the Committee.

Mr A Matumba (EFF) said that according to his understanding, it was not about the money that was going to be spent, but who would be spending it. The Director-General and his deputies would be trusted with implementing the budget after they had already spent R37 million on a lodge that had still not been built. The lack of consequence management regarding the lodge made it hard to trust those in charge of the budget. The project itself was a good idea, like many other similar projects in the county, but the problem was the irregular expenditure that had no consequences afterwards. How would the Committee have the confidence to approve the budget when something like that could happen? This is “arrested development”.

He said that Mr Tim Harris, interim SAT chairperson, had addressed matters not in the annual plan of South African Tourism. He had discovered that Mr Harris had established an office in Cape Town at a company called Consulum, where he did the same work as at SAT. Mr Matumba said that Hr Harris's work for SAT was an attempt to advance his position in Consulum. He referred to a March 2023 letter which had been copied and pasted by Mr Harris in both his capacities in the two entities, Consulum and SAT. He added that Mr Harris had too much personal interest, and the money he received as chair could be considered “pocket money”.

Mr Matumba said that it was untrue that the power of the officials had been restored. This was a lie told to Parliament in front of the officials whose duties had been halted. He said that lies to Parliament were an indication that they were being undermined as representatives in one of the highest institutions in the country. He reiterated that he supported spending money for the greater good, but the people who were going to be trusted with this task would not spend it accordingly. He said there was no root development – in just one visit, the Committee found R30 million down the drain – what about the other provinces not visited?

Ms P Mpushe (ANC) told the Committee that she had once raised a point that it seemed that the Department of Tourism was unwilling to ensure that those identified as wrongdoers were prosecuted. She wished to discuss the appointment of the board secretary. The Director-General had opted not to consider the Tourism Act. It had failed to give the Committee more information on what had directed him to do this in the employment of the board secretary.

She did not support the approval of the budget, even if conditions were put forward. This was because SAT had failed to present its case in its annual performance plan (APP), further undermining the Committee. The Chairperson and Chief Whip should always follow up with the relevant offices to ensure that the Committee is in line with procedure.

Ms Mpushe recalled that Ms Kholeka Zama, one of the SAT board members, had taken a decision all by herself without consulting the board. The Tourism Act stipulated that there should always be 14 days between meetings and special days. This had not been done in handling the resignation of the chief executive officer (CEO). She added that Minister De Lille had lied under oath when she told the Committee that the CEO would not be available to serve three months' notice as per the contract, yet it was found that the CEO was in fact, available to serve his notice if the Department allowed him to.

On the issue of the individual who represented government, Ms Mpushe asked that it be rephrased, stated that the individual had not performed well, and reported to the Department. She added that the Committee had also reported on this.

The Chairperson allowed Dr Khuzwayo to respond to the questions and comments from the Members. She asked that his responses clarify the matter of Air Access which Mr Tim Harris mentioned.

Dr Khuzwayo told the Committee that the terms Air Access and Air Lift were used interchangeably. He explained that Air Access was still a challenge in Africa, because it was costly for Africans to travel by air, for example, to other European countries. There were still no connecting flights to some of the biggest African countries, which meant that sometimes travellers had to travel to other countries to connect to African countries. The Department should work closely with the major cities to discuss this issue. Some cities, like Cape Town and Durban, have discussed their own plans. Perhaps this was what some Members were alluding to regarding the business interests of some SAT Board members. Often these negotiations involved big players, like hotels and airlines, and the use of intermediaries, or a middleman. He said the Committee should look further into the issue of Air Access.

He said this issue was not in the APP of either DT or SAT. Dr Khuzwayo was of the opinion that it should be in the APP in future.

A Committee Member asked Dr Khuzwayo about the African Union (AU) declaration, and to empower the Committee by clarifying this matter and indicating the direction they should take as the people overseeing the Tourism Department or sector. This speaks to the Air Lift strategy.

Dr Khuzwayo said that the declaration had faced challenges regarding implementation because some countries had not ratified it due to issues of air space rights, national airline capacities and other issues. It was still a matter that needed to be addressed. He said he would include these matters of emphasis raised by Members in the amended report.

Dr Khuzwayo said the issue of the Committtee appropriating the budget or not was a difficult issue for him to grapple with and he consulted colleagues to look at the power the Committee had to not appropriate the budget. He was informed Parliament had no legal power to not appropriate the budget. The issue was about processes to follow should the Committee not appropriate the funds and that this had never been done before.

The Chairperson referred to a certain clause in the Constitution that explicitly empowered Parliament to appropriate the money meant for government departments. That power was not implied, but was vested in the Parliament of South Africa. She told Dr Khuzwayo that his colleagues should be refunded for their tertiary qualifications because they seemed to be counterfeit.

She said the Committee would request, suggest or recommend, through the Office of the Speaker, that Parliament should not appropriate the money for the Department - full stop. She reminded Dr Khuzwayo that the Constitution should be upheld at all times.

Dr Khuzwayo agreed with the Chairperson, and said he would include this constitutional provision in the report, which, together with the Rules of Parliament, empowered the Committee in this regard. He referred to the two views of Committee Members, Ms Mpushe and Ms Makhubela-Mashele. Ms Mpushe’s view was captured in the report, but created the problem of deciding what next. Perhaps the legal unit should be tasked to advise the Committee on what it should do next.

He referred to Ms Makhubela-Mashele’s view, and said it was safer [to impose conditions] and would allow the Department to appropriate the budget and make the transfer of the 50% only if all the conditions were met.

The Chairperson told Dr Khuzwayo that R560 million had already been transferred to SAT two weeks ago by the Department. She said the Director-General had confirmed this. She asked how the Department would be held accountable for so much money when it had proved its limited capacity to oversee an entity, which had also enabled the Director-General to stay absent from work for four months. She advised Dr Khuzwayo to obtain a copy of the Constitution and read page 110 because the money received by the Department was from the National Revenue Fund, through an Act of Parliament.

She said that the Department had come to the Committee and presented its APP, which the Committee did not approve. That APP had raised many questions which had been left unanswered by the Director-General and the Minister. She added that the irregular expenditure of previous years had been raised in many previous meetings with the Auditor-General, but was yet to be resolved. This also applies to the quality of financial statements.

Ms Makhubela-Mashele asked for clarity from Dr Khuzwayo on his statement that no Committee after 1994 had ever rejected a Budget Vote that they were appropriating for. She asked the Committee to make sure of their decisions to ensure they did not err in their approach. Perhaps the Committee needed further advice. The approval of the budget vote resides not only with the Committee, but also the National Assembly and the National Council of Provinces. She suggested the report be adopted, with the recommendation that the budget be approved with strict conditions and deadlines. Even if the Committee rejected the budget, the House of the NA and the NCOP could still approve the budget as part of the basket of schedules.

The Chairperson countered that this was why the Committee wrote to the NA Speaker as part of this exercise.

Ms Makhubela-Mashele replied that the report would be tabled and all the recommendations would stand. She said there was a unit looking at all Committee reports and their resolutions to follow up on their implementation. She said this was a learning exercise for all and many roleplayers were involved in approving the budget. The Committee would distinguish itself through its report recommendations.

Mr Matumba referred to the Constitution and the power vested upon Parliament not to appropriate funds. He said that the situation the Committee was dealing with was not normal. He would love to agree to the issue of putting conditions on the transfer of funds to SAT, but history has proved that this would not be respected, along with recommendations that had not been considered in the past. The Department was not ready to meet any requirements, conditions or recommendations. There was agreement amongst Members that the Department was collapsing. Under the circumstances, if the funds were released, value for money would not be realised and would not be accounted for. SAT does not even have a chief marketing officer – the core duty of this entity is to market South Africa! Can we really sit here and say let’s give the money? The Committee is protected by the Constitution. Even if Parliament appropriated the money, the Committee could still sleep peacefully by setting this precedent for which it could be respected.

Ms Gomba said everything under discussion today emanated from the presentation and interaction with the Department and SAT. While she understood what Ms Makhubela-Mashele was saying about conditions, she pointed out that although she did not want to single out Members, it was Ms Makhubela-Mashele that directed the Committee to the discussion around withholding the appropriation. This approach came from the Committee itself, not “from the air” and led by certain individuals based on what the Committee was empowered to do. She felt it important to point out where discussions emanated from.

Mr De Freitas said he felt the Committee was like an abused spouse that kept returning to its abuser. He said he has been in Parliament for 15 years and has never seen this attitude by officials and others. He pointed out that although no Committee had ever rejected a budget before, a Minister had also ever been summonsed before a Committee before but this Committee did it so just because something has not been done before, does not mean it cannot be done in the future. The Committee must do the right thing. He was concerned by the comments of Ms Gomba because the Committee is not a “rubberstamp”. The Committee saw for itself communities in the North West with no opportunities and dilapidated tourism sites which could be generating income for local communities and the economy. He was very disturbed by what came to light surrounding Tim Harris and said it was wrong for officials to use their own interests when on a Board. He said the collapse was more than just SAT – it stemmed from the Department. The Committee should be encouraged by its convictions and do the right thing. He agreed that the Department could not be trusted to meet funding conditions but there is still time to get things back on track. He was deeply concerned by what the SAT board was doing, destroying SAT, the Department and its reputation.

Mr De Freitas reminded the Committee of what the agreed to focus on when the Committee’s term started – the township economy, small dorpies and rural areas where real people need these interventions the most.

He noted that during the Durban meeting, Minister De Lille promised to return to the Committee but he was not aware that she had. He felt this was disrespectful and “pointed the middle finger” to the Committee and Parliament.

A Committee Member stressed the importance of consequence management. She did not see why the NA House could not agree with the Committee’s recommendations if Members caucused their parties. She asked what would happen if the Department did not stick to the Committee’s recommendations. Who would be held accountable? She was concerned by the track record already. She felt the disrespect started with the Minister.

Another Committee Member agreed. She added that when the Committee was visiting North West, there were women in tourism who received no support from the Department. Moreover, the Department had consistently underspent on the Expanded Public Works Programme (EPWP). She felt the Committee should talk to investigating authorities. She appealed to the Committee not to appropriate the funds to the Department so that the Committee would no longer be undermined.

The Chairperson noted that there was a very interesting letter relating to the APP regarding the annual procurement plan, sent by Mr Tim Harris. She proceeded to read out the letter to Members. She said the “million-dollar question” was if SAT had a board meeting while everyone was in Durban. She asked that each Member of the Committee be given a printed copy of this document. Along with this letter were the resolutions of the board. The Chairperson found it so shocking that there was a Portfolio Committee meeting on 9 May which ended just before midnight but on 10 May, there were a “plethora” of resolutions from the board. The understanding of the Committee was that the Minister would send the Committee the resolutions of the board before their implementation. All these documents would be printed for Members as empirical evidence.

The Chairperson noted that the Minister had since written to the DG to request that infrastructure should be under her office – the Chairperson said this was an “anomaly” which had never happened since 1994.

She said the Committee needed to write to the Minister about lying before Parliament, which was perjury. Ministers had not lied to Parliament since 1994. The Minister will have to bring all the documents before the Committee.

Clarity is also needed on what happened in Durban in the board meeting on 10 May. The Committee must know if these are the resolutions of one individual. Things are falling apart. This is very bad for the country and government.   

Dr Khuzwayo said the report captured the sentiments of the Committee meetings, especially the meetings on 2 and 9 May. He said the support staff would enhance certain aspects of the report to capture issues that may have been watered down or completely missed. He noted that there were many interpretations, technicalities and legalities surrounding Parliament not appropriating budgets. He advised the Chairperson write to legal services regarding this Budget Vote Report and attach the Committee minutes of 2 and 9 May. He repeated that he would improve certain aspects of the Budget Vote Report as per the discussions today.

A Committee Member said that the Committee had many critical, unanswered questions from the meeting in Durban and these matters required engagement. She asked if answers had been sent. She wanted to ask how many board committees SAT had – this remained an unanswered question. She expressed concern about the structure of these committees and the delegates that were constantly sent to the Committee.

The Chairperson said the Committee had concluded its process on the Budget Vote Report.

Report of the Portfolio Committee on Tourism on Provincial Oversight Visit to North West Province

Dr Khuzwayo said the main issue was that the necessary approvals had not been obtained for the project. He had presented a 60-page document to the Committee which detailed the implementation of structures, gravel roads and property. The project implementation was estimated to cost R37 million, when the Department had a budget of R40 million.

Dr Khuzwayo said criminal cases were reported, but no one had been arrested yet. Matters had been reported to the Public Prosecutor, but there were no consequences. A repeat visit had been scheduled together with the Department of Public Service and Administration (DPSA) to make observations on the progress of the project.

Read full report here https://pmg.org.za/tabled-committee-report/5361/

With grammatical amendments to be made, the report was adopted.

The Chairperson asked that the minutes of the previous meeting be deferred to the next meeting due to time constraints.

She said the Committee would be resolute in its recommendations not to appropriate the budget vote. Members were encouraged to report this to their party caucuses. Further legal advice would also be sought. She noted there was no legislation that superseded the Constitution. Members would also receive the SAT documents referred to earlier, to see the SAT resolutions taken the day after the Portfolio Committee meeting in Durban.

The meeting was adjourned.