MINISTRY: PROVINCIAL AND LOCAL GOVERNMENT REPUBLIC OF SOUTH AFRICA

INTRODUCTION

· Chairperson

· Honourable Members

· Ladies and Gentlemen

Whenever the Ministry and the Department of Provincial and Local Government (dplg) sought the services, courtesy and fellowship of this committee, we did not fail to profit from it.

It is indeed a wonderful privilege and honour for us, once more to stand before the committee. This particular occasion gives us the opportunity formally to introduce Deputy Minister, Nomatyala Hangana and to congratulate the Honourable Members who were entrusted with the responsibility of serving on this committee. Allow me to single out for specific mention the Honourable Yunus Carrim, who by popular acclaim appears set for a third term.

We look forward to five years of productive and fulfilling association with the Committee.

DEPARTMENTAL BRIEFING

Our brief appearance this morning serves as a prelude to two days of detailed briefing to be done by the Director General and a team of senior officials from dplg. As we have said before, from the point of view of government, the key challenges facing policy design are:
· unemployment

· poverty and

· underdevelopment

These problems are a function of the exclusionary policies which were an institutional reality of South Africa for many decades. The presentation by the DG and other officials from the department will indicate how the department is gearing itself to ensure that the budget allocated to us for the 2004-05 financial year is put into proficient use. In other words, they will take the committee through a Matrix of Priorities which forms the backdrop of interventions which are aimed at ensuring that the development path of choice can be sustained.

WHERE WE COME FROM?

In his recent State the Nation Address to Parliament, the President spoke about the challenges of exclusion and inclusion which are occasioned by the duality that characterizes our national economy. Indeed, the geographical spread of economic activity cannot but translate into a stubborn incidence of absolute levels of poverty afflicting households, local areas, regions and ultimately, the nation. It is this causal relationship between the apartheid spatial design, underdevelopment and poverty that we set out to redress since 1994.

The macro-reorganization of State organs, which include the establishment of the three spheres of government (national, provincial and local) was therefore intended to provide a framework for obviating the reproduction of duality in the economy and for realizing the goal of sustainable development.

ACHIEVEMENTS

The transformation which has taken place so far has had some beneficial effects:
· It has provided us with a framework to design a formula for equitable distribution of nationally raised revenue, both between spheres of government and spatially.
· It has allowed us to increase levels of social spending, thereby touching the lives of the most vulnerable sectors of society in more positive ways than was the case hitherto.
· It has also given the possibility to usher local government into a virtuous circle of capacity building. This includes socializing the local government sphere in the task of creating conditions for sustainable local economic development.

PROBLEMS AND OUTSTANDING CHALLENGES

The achievements we speak of do not alter the fact that we still face many challenges, both of a qualitative and quantitative nature:

· The increase in social spending has resulted in a balance between social expenditure and investment in growth which is not right. As a matter of fact, social expenditure is currently threatening to crowd out other forms of expenditure. Needless to say, this has ominous implications for provincial budgets.
· compared to the last decade of the pre-democracy era, the first decade of democracy has seen a significant decline in levels of private and public investments.
· Some of our municipalities continue to languish in the lower-end of the capability-spectrum-this with unfortunate implications for the quality of service that many of our people receive from municipalities under whose jurisdiction they fall.

WHERE TO FROM HERE?

Government's responsiveness to all these factors and others, is aptly captured in the Programme of Action which was enunciated by the President in the State of the Nation Address to Parliament:

The President speaks of the major programmes we are initiating with a view to removing the many things which constitute fetters to growth and development. These include the infrastructure backlogs that afflict our rural areas as well as those areas that apartheid defined as peripheral to urban centers.

We aim to significantly increase the stock of public investments in the economy through such programmes as the Expanded Public Works Programme and the Municipal Infrastructure
Grant. The fact that we also intend to ensure that a significant part of the resources which derive from these programmes is directed to the nodes, means that we shall be lifting the level of investment on rural infrastructure as well as an economic and social infrastructure in the marginalized parts of our urban centers.

· The overall approach of government to this post-election environment has a profound spill-over effect to local government. The DG will in all probability talk about the short-term interventions which we shall be making in order to optimize the impact of our local government system. I must emphasize though that we shall be unfolding these short term measures while staying focused on the medium to long term goals.

We intend to be out there, working with municipalities and taking them through a process of learning-by-doing. We want to help improve their capacity for addressing the needs of the indigent and for operationalising government's policy on Free Basic Services.

· I must also point out that all the things we seek to achieve in the 2004-05 financial year, will require that we put in place, an Intergovernmental Relations Framework for galvanizing the efforts of the three spheres of government into an integrated operation. In this regard, we shall soon be approaching this Committee with the IGR Framework Bill for piloting through the parliamentary process.

Meanwhile, we shall be working with provinces in order to ensure that they too pay systematic attention to issues of economic development. This is crucially important because the goal of a single and integrated economy is not realisable in conditions that are characterized by fragmented efforts.

Of much greater importance, will be the task of mobilizing the rest of society to play a role in matters of governance and development. This Committee played an important legislative role to put in place the necessary legal framework for this.

As we speak, we already have i₁n various municipalities, WARD COMMITTEES of different functional strengths. We hope to join hands with members of this Committee as we go out to connect with these WARD COMMITTEES in order to add to their strength for mobilizing our people.

For now, we wish you an enjoyable two days of deliberations and a successful outcome.

I thank you.