A SUMMARY OF KEY ISSUES RAISED IN THE HEARING ON THE 2004/05 BUDGET AND STRATEGIC PLAN OF STATISTICS SOUTH AFRICA

A SUMMARY OF KEY ISSUES RAISED IN THE HEARING ON THE 2004/05 BUDGET AND STRATEGIC PLAN OF STATISTICS SOUTH AFRICA

5 June 2004

PORTFOLIO COMMITTEE ON FINANCE
Prepared by Albert van Zyl Research Associate University of Stellenbosch

The Committee's general assessment was that Statistics SA has managed to engage with most of the management and strategic challenges facing it. It noted specifically the progress that had been made towards the refinement and completion of the business register. The Committee would be engaging with Statistics SA in a discussion of how best to execute its oversight role and provide the necessary support to the agency

I. IMPROVINGECONOMICSTATISTJCS

Statistics SA indicated that it had started working on the improvements 'of economic statistics even before the CPI crisis of .2003. To this end a Review Task Team of Economic Statistics was established in 2001. One of the key tasks in this regard has been the updating of the business register that forms the basis for calculating the GDP. Post 1994 Statistics SA started off with an outdated Business Address Register (BAR) which has been replaced by an integrated business register that captures both VAT registered and non-VAT registered businesses. This register is largely based on the SARS VAT register but has been supplemented with registers from Income Tax, PAYE, UIF, the Skills Development Levy and DTI records. During 2003 Statistics SA ran parallel surveys with the BAR and integrated business register for quality control purposes.

A further issue that the Committee expressed concern on was the consolidation of the Register. Statistics SA explained that it has this responsibility at the moment. Its work was however hampered in this regard since some of the sources of the register are confidential. It could therefore not make the register available to other agencies once it has been finalised, but only use it for its own purposes. The Committee suggested that the possibility of a change in the relevant legislation be considered to remedy this situation.

2. CPI DISCONTINUITY

The Committee expressed concern around discontinuity in the calculation of the CPI and CPIX that resulted in last year's errors in calculation. Statistics SA explained that the difficulties in the calculation of the CPI were caused by the discontinuation of the rental survey. A similar quarterly survey was piloted this year and would be reintroduced next year. In addition Statistics SA would refine its method of calculating the CPI by moving from postal surveys to a 'diary method' whereby a number of individual households would record its daily expenses. Albeit a more costly method, this would give a better indication of the actual basket of goods consumed by the average household

3. GDP CALCULATION The Committee expressed concern about the impact of the re-basing of the QDP ' figures on continuity in this time-series. Statistics SA explained that it. would; only know the impact of this rebasing once the exercise has been completed .in'.- November.

Statistics SA also recommended that a relatively independent agency such as itself become the sole agency for calculating the GDP since it is not implicated in policy as is the case for Reserve Bank and National Treasury.

The Committee further expressed concern that Statistics SA only calculated the GDP and not the GNP, a broader measure taking account of the value that South African goods and services are adding elsewhere. Statistics SA acknowledged that this was an important shortcoming and that it would be investigating this area. It is however constricted in this regard because of the lack of standardisation of trade statistics in especially the SADC region.

4. THE ROLE OF STATISTICS SA IN THE COMMITTEE ADMINISTERED PRICES

Statistics SA indicated that it participates in this Committee and had developed a method to calculate the CPI and CPIX with and without administered prices and would shortly be reporting to the President in this regard. Some definitional issues over the difference between 'administered' and 'determined' prices still had to be cleared up, however.

5. CAUSES OF DEATH SURVEY
The Committee also expressed concern around .the ongoing challenges and delays around the 'Causes of death' survey. Last year's report to the House explained the nature of these difficulties in capturing the information. Statistics SA explained that in the short term it has prioritised a number of years in the 1997-2003 time series as well as approached the private sector in order to access data coders. These two interventions should speed up 'the process. Statistics 'SA also pointed out that its survey cannot reliably report on AIDS- related mortalities until AIDS becomes certifiable..In the long term Statistics SA would seek to standardise the information reported on in death certificates as well as investigating the possibility of an automated system.

6. CENSUS DELAY AND THE BUDGET Statistics SA reported that Cabinet had made a decision to only have the next Census in 2011 (rather than 2006) after the finalisation of the ENE. The budget numbers of the ENE would therefore need to be adjusted accordingly. Statistics South Africa undertook to report to the Committee in this regard. Part of the funds originally allocated for the 2006 Census would be spent on an expanded General Household Survey (GHS) in 2006 to ensure continuity in the time-series between the 2001 and 2011 Censuses. If the dwelling register can be completed before the 2006 GHS, a high degree of continuity would be ensured. The main limitation will be that the GHS will not desegregate down to the same level as the Census, resulting in some discontinuity in smaller geographic units.

7. INTERACTION WITH PROVINCES AND LOCAL AUTHORITIES Statistics SA has established offices in all nine provinces as well as 25 district offices. A total of 54 district offices will ultimately be established. These offices will assist with the collection as well as dissemination of data. They have already provided briefings to all 9 provincial governments on using the Census 2001, but there is a bottleneck in reaching local authorities.

Statistics SA is currently working with Limpopo to pilot the use of the NSSat provincial-level. The NSS is being piloted this year at the national departments of- Education, Local Government and Home Affairs.

8. AUDITOR GENERAL ISSUES & MANAGEMENT REFORMS The Committee expressed concern about the ongoing qualified Auditor General (AG) reports. Statistics SA assured the Committee that these management and financial management issues were a thing of the past and that all the issues raised by the AG would be addressed by the end of this calendar year. In addition the necessary management instruments have been put in place to ensure that none of these problems would recur.

9. TRAINING, DISSEMINATION AND CAPACITY BUILDING The Committee expressed concern about the building of capacity and training amongst especially Previously Disadvantaged Individuals, given the past shortcomings in statistics and mathematics teaching at schools. Statistics SA outlined a number of internal and external capacity building initiatives that it is engaged in. These include the Census ©School programme, enrolling staff in degree courses and establishing a virtual training facility. It undertook to submit a written report to the Committee on activities, progress and targets in this regard. Statistics SA also indicated that apart from its new website it was disseminating its printed products very widely. It was further offering courses to journalists, government, officials and community radio stations to facilitate the use of its' research findings. . .

10. EMPLOYMENT EQUITY The Committee expressed concern about the lack of reporting on targets and achievements with regard to employment equity. Statistics SA undertook to submit a written report in this regard

11. POVERTY STATISTICS AND INDICATORS
Statistics SA reported that it had established and institutionalised a unit that engages in extensive work on poverty indicators. The unit played a key role in calculating the indices used in the 10-Year Review and is in continuous discussion with the National Treasury and other stakeholders.