REPORT OF
THE PORTFOLIO COMMITTEE ON DEFENCE ON THE 2008/9 BUDGET VOTE 19 AND THE
2008/9-2012/13 STRATEGIC PLAN OF THE DEPARTMENT OF DEFENCE
The Portfolio Committee on Defence, having scrutinised
the Budget Vote of the Department of Defence (Vote 19) for the 2008/09
financial year and the forward estimates for the 2008/09 to 2010/11, included
in the 2008 Estimates of National Expenditure (ENE), as well as the
Department’s Strategic Plan for 2008/09-2010/11 submits the following report:
I.
INTRODUCTION
The Portfolio Committee on Defence considered the 2008/09 Budget and
Strategic Business Plan on 19 May 2008, as part of its oversight function over
the Department of Defence. The report is based on both the departmental hearing
held as well as the subsequent committee deliberations.
The Committee in its interrogation of the budget and strategic plan for the
current financial year sought to determine whether those priorities, as
outlined in the State of the Nation Address are reflected in the 2008/09 Budget
of the Department of Defence, as well as how the Budget would ensure the
realisation of the departmental strategic objectives.
II. OVERVIEW
OF POLICY PRIORITIES FOR THE 2008/2009 FINANCIAL YEAR:
The following policy priorities emanate from the 2008 State of the Nation
Address (SONA); the Department of Defence’s 2008/09-2010/11 Strategic Business
Plan as well as the 2008/09 Defence Budget:
(a)
Increased participation in the International Relations Peace Stability
Cluster’s
(IRPS):
As a key departmental priority for the period under review, the Department aims
to increase its participation in the IRPS though improvement in its
intelligence gathering capacity. The substantial increases in the Defence
Intelligence programme and the Operational Intelligence sub-programme are
therefore in line with this priority.
(b) Promoting peace and stability in
Africa
The 2008 State of the Nation Address reaffirmed Government’s commitment to
the peace processes underway in the Democratic Republic of the Congo; Chad;
Burundi, Sudan, Cote I’voire, Somalia, the Comoros and the Central Africa
Republic. In line with the promotion of
peace and stability on the continent, the Department will annually prepare 3084
SANDF members for deployment.
(c ) The
expansion of the Military Skills Development System
The 2008 State of the Nation Address referred to the 24 Apex priorities
that will be incorporated into the Government Programme of Action. Priority 24 indicates that the SANDF will
gradually increase its military skills development system intake to 10 000 over
the medium term, to rejuvenate the force and to provide more young people with
technical and social skills. This expansion will ensure a continuous input of
suitably qualified, fit and healthy young soldiers until the rejuvenation
requirements of both the regular and reserve forces of the SANDF have been met.
(d) The rejuvenation and upgrade of the
Landward Defence Programme:
According to the Department’s Strategic Plan, the Defence Update aims to
modernise and renew the landward defence force’s main equipment over the medium
and long term. The first priority is the light and mobile forces, airborne
forces, and intelligence and engineer elements used in support of international
commitments.
(e) Addressing issues relating to
military veterans
The 2008 State of the Nation Address stipulated a review of structures and
functions aimed at providing services to vulnerable groups such as military
veterans. The Department’s Strategic Plan identifies the creation of a single
veterans association.
(f) Provision of a special dispensation
for scarce skills personnel
According to the 2008 State of the Nation Address, critical vacancies across
all spheres of Government should be filled within six months of such openings
emerging. The retention of scarce skilled personnel continues to lead to a
reduction in experience levels and remains a challenge for the SANDF. To
address this, the Strategic Plan indicated that the Department is exploring
strategies that provide for a special dispensation for scarce skills personnel
such as engineers, Special Forces operators and military health practitioners.
(g) Infrastructure and DOD Works Regiment:
The Department will draw up a master plan to deal with infrastructure. This
plan will include priorities, costs and the development of a phased
approach. A Works Regiment will ensure
an in-house capacity to attend to all facilities.
(h) Increase in
In pursuit of cultivating sound diplomatic relations, the Department will aim
to increase its diplomatic representation from 32 to 37 countries over the next
three years in line with Government’s foreign policy. This effort is supported
by an increase in the Defence Foreign Relations sub-programme.
III. GENERAL RECOMMENDATIONS
(a) The status of the Defence
Update:
The
Committee notes with concern that the Defence Update has not been submitted to
Parliament for consideration. However the 2008 Estimates of National
Expenditure indicates that a long term implementation plan will be developed
for the implementation of the Defence Update. The Department of Defence should
submit the Defence Update to Parliament during the third term.
(b) Skills Retention:
The Department should finalise its policy on scarce skilled personnel as a
matter of urgency. A Task Team should be established to address this matter. Progress made in this regard to be
submitted to Parliament during the third term.
IV. OVERVIEW
OF THE 2008/09 BUDGET AND THE 2008/09-2010/11 STRATEGIC
PLAN
OF THE DEPARTMENT OF DEFENCE:
(a) Broad Expenditure trends:
The Department of Defence has a total budget of R28.23 billion. Although the budget allocation for 2008/09 has
increased by 7.4 per cent in nominal terms (excluding the rate of inflation),
it has in only increased by 0.27 per cent in real terms (including the rate of
inflation).
The Air Defence programme is the
largest programme in the Defence budget, and constitutes 31.9 per cent of the
Department’s total expenditure. The programme makes provision for the
procurement of the Gripen advanced light fighter aircraft at a budgeted cost of
R9.9 billion, as well as the strategic airlift capability programme. The Landward Defence programme remains the
second largest programme at 24.06 per cent. This is in line with the
Department’s priority to renew the landward forces’ equipment.
(b) Allocation per programme:
(i) Programme 1: Administration
This programme focuses on Departmental policy
development, management and administration.
Budget allocation: The R2.426 billion.
Trends:
The new Property Management sub-programme constitutes 53.03 percent of
the allocated budget. This is mainly due to the devolution of funds from the
Department of Public Works. The Human
Resources Support Services sub-programme constitutes the second largest budget
allocation. Services rendered to the military veterans are included in this
programme.
Committee Recommendations:
The decrease in the allocation to the Human Resource Support Services
sub-programme is a concern given the set priority of improving the services
rendered to military veterans. The
Department must submit to Parliament a detailed report on the measures in place
to improve the well-being of military veterans as well as the proportion of the
budget dedicated to this during the third term.
The Committee notes that the 2007/08 budget allocation to the Reserve Direction
sub-programme was under spent, hence the decrease in its allocation for the
current financial here. It is recommended that the any unspent funds be
ring-fenced to ensure proper utilisation, in future.
(ii) Programme 2: Landward Defence
This programme provides prepared and supported
landward defence capabilities for the defence and protection of
Budget allocation: R6.7
billion.
Strategic objectives:
The provision of an infantry capability of three battalions for external
deployment; three companies for internal deployment; one air landed battalion
and two multi-role battalions in reserve and four battalions involved in
exercises
Exercising one tank squadron and one armoured car squadron;
Exercising one composite artillery regiment and one light artillery battery
and having one light artillery battery in reserve;
Exercising one air defence artillery regiment and one light air defence
artillery battery and having one light air defence artillery battery in
reserve;
The provision of an engineer capability of three engineer squadrons for
external deployment, one composite engineer squadron for internal deployment
and exercise one light engineer squadron
Trends:
The Landward Defence programme accounts for an average of 24 percent of
the Department’s total expenditure for the current financial year. While the
2008 Estimates of National Expenditure indicates an increase in the budgetary
allocation to this programme, it has in actual fact decreased, when taking into
account the rate of inflation. This is a cause of concern, given the goals of
modernising the landward forces main equipment and the envisaged increase in
the intake of MSDS members. The
Committee notes the 39.19 percent decrease in the allocation to the General
Training Capability sub-programme. MSDS intake into the Army is funded by this
sub programme. The Infantry Capability and the Support Capability sub
programmes constitute the largest portion of this programme’s budget and
amounts to at 34.78 percent and 39.19 percent, respectively.
Committee Recommendation:
The Department should submit to Parliament a report on the State of the South
African Army during the third term. The decrease in the allocated budget to
this programme may impact on the objective to modernise and renew the landward
forces.
(iii) Programme 3: Air Defence
This programme provides prepared and supported air defence capabilities for the
defence and protection of
Budget Allocation: R8.2
billion.
Trends
This programme constitutes 31 percent of the Department’s total
expenditure, and represents a 5.11 percent increase from the last financial
year. This high expenditure is due to the production and delivery of Gripen
advanced fighter aircraft as well as the strategy airlift capability programme.
Strategic Objectives:
Annual provision of four mixed (medium and light) squadrons and one combat
support squadron;
Three medium transport squadron, one light transport squadron and nine reserve
squadrons will enhance transport and maritime capability.
The provision o
f an air combat capability of one combat squadron;
Providing capacity for a 24 hour air command and control capability
Committee Recommendation:
The Department of Defence should submit to Parliament a progress report on the
following matters during the third term:
The result of qualification trials necessary for accepting the Gripen light fighter
aircraft into service;
The life cycle costs of the new equipment;
The establishment and adaptation of the infrastructure to support this new
equipment.
(iv) Programme 4: Maritime Defence
The Maritime
Defence programme provides combat-ready and supported maritime defence
capabilities for the defence and protection of
Budget Allocation: R1.8 billion
Strategic objectives:
The provision of four frigates; one combat support vessel, three inshore
support vehicles and a maritime reaction squadron;
The provision of a subsurface capability of three submarines;
Two mine countermeasures systems to ensure the safe access to SA harbours and
where mine clearance may be required.
Trends:
The total budgetary allocation to this programme decreased significantly by
28.16 percent. This is attributed to the commissioning of the four frigates and
three submarines as part of the strategic defence procurement programme.
Total
funding to Maritime Combat Capability sub-programme decreased by 61.11 percent,
as compared to the previous financial year. This is mainly due to the final
contractual payments in terms of the strategic defence procurement programme,
finalised in 2007/08 financial year.
Recommendations:
The Department should submit a progress report on efforts made to mitigate the
impact of limited available funding on the SA Navy’s ability to meet the life
cycle costs of the new equipment and to establish and adapt the infrastructure
to support the new equipment. The
Department should report during the third term.
(v) Programme 5: Military Health Support
The Military Health Support programme provides prepared and
supported medical combat support elements and services.
Budget allocation: R2.11 billion. Taking into account
the rate of inflation,
the allocation reflects a real increase of 7.17 percent. This is
mainly due to the above-average increases in the remuneration of health
professionals, the anti-retroviral roll-out and the increase in the MSDS
intake.
Key strategic priorities:
The provision of five medical battalion groups plus a specialist medical
group to improve medical support provided to deployed and contingency forces.
The provision of a comprehensive multi-disciplinary
health service to the 230 000 patient population.
Trends:
The largest portion of this programmes budget is allocated to Area Military
Health Service (33.98 percent) and Specialist Tertiary Health Service (35.12
percent). The Strategic Direction sub-programme has received the largest
increase as compared to the 07/08 allocations to improve the staffing levels at
the South African Military Health Service headquarters. The increased
allocation to the Military Health Training Capability is in line with the
envisaged increase in the number of MSDS members.
Committee Recommendations::
The Committee notes the deteriorating conditions of hospitals and facilities.
The Department should brief the Committee on the progress made in the upgrade
of these facilities during the third term.
The Department should clarify whether the increased remuneration of health
professional curbed the exodus of skilled professionals. This information to be
submitted to Parliament during the third term.
(vi) Programme 6: Defence
Intelligence
The Defence Intelligence programme provides a
defence intelligence and counter-intelligence capability.
Budget Allocation: R5.09 billion. This represents a 18.36 percent increase in allocated budget.
Key strategic objectives:
The provision of a defence capability and service;
To provide for a defence counter –intelligence capability and service.
Observations:
Increased allocation: The Committee notes that the increased
allocated budget is in line with the planned improvement in the Department’s
intelligence collection capability to collect intelligence information, and is in
line with the Department’s priority to improve its intelligence capacity
Skills capacity: The persisting recruitment and retention of
appropriately skilled staff for this programme is a cause of concern. The Department has raised this matter during
the 2007/08 Budget and Strategic Plan presentation.
Recommendations
The Department should submit the following progress reports to Parliament
during the third term:
Progress made in the recruitment and retention of critically skilled personnel;
Progress made in the reconstruction of the Defence Intelligence Headquarters.
(vii) Programme
7: General Support
The General Support programme provides general support
capabilities and services to the Department
Budget allocation: R3.9
billion allocation and represents a 4.7 percent increase from the previous
financial year.
Key
strategic objectives:
The establishment of a joint logistic operational
support group will ensure the operationally of 90 percent of all deployed
equipment.
Phased repair and maintenance of all Departmental facilities
over the next three years. The Department will complete 12 of the 32
projects this year.
The provision of a centralised command and management
information capabilities.
A five percent reduction in crime investigations. This
will be done through the provision of a military policing capability of one
Provost Company fro deployment as well s 22 area offices and 21 detachments for
investigations and crime prevention.
Trends:
Joint Logistic Services: The increased allocation
to this subprogram is in line with the Department’s objective to repair and maintain defence facilities
and to rejuvenate the air supply unit.
The increased allocation to Command and
Management Information Services will be utilised to upgrade and improve the
defence information and communication systems. This is in line with the
Department’s priority to improve its administrative processes, accountability
and structure
Omitted information: The Strategic
Plan does not identify and explain the key budgetary risks and challenges
confronting this programme.
Committee Recommendation:
The Department should brief the Committee on the state of ammunition in
the SANDF on 11 June 2008. During a previous interaction, the Department
identified that the risk of unstable and unsafe ammunition still exists. This
briefing should also include information on the progress made in the disposal
of obsolete ammunition as well as the safety and environmental impact of the
existence of ammunition depots close to communities.
(viii) Programme 8: Force Employment
The Force Employment programme provides an operational
capability to successfully conduct all operations, joint and multinational
military exercises as well as the management of defence capabilities.
Budget allocation: R1.6
billion.
Key strategic objectives:
Annual participation in 9 external peace missions over the MTEF period. This
would be in accordance with the broader objective of increase participation in
the promotion of continental peace and security
Conducting 36 joint, interdepartmental and multi national military force
preparation exercises over the next MTEF period.
Trends:
While this programme contributes towards Government’s commitment to promoting
peace, stability and security in
Committee Recommendation:
The Committee notes the unauthorised expenditure on force employment as
highlighted by the Auditor General. The Committee recommends that the
accounting officer of the Department of Defence, must, in consultation with the
Department of Foreign Affairs and the Minister of Defence supply a report on
this matter.
V.
SUMMARY OF COMMITTEE RECOMMENDATIONS
The Committee notes with concern that the Defence Update has not been
submitted to Parliament for consideration. However the 2008 Estimates of
National Expenditure indicates that a long term implementation plan will be
developed for the implementation of the Defence Update. The Department of
Defence should submit the Defence Update to Parliament during the third term.
The Department should finalise its policy on scarce skilled personnel as a
matter of urgency. A Task Team should be established to address this matter. Progress made in this regard to be
submitted to Parliament during the third term.
The decrease in the allocation to the Human Resource
Support Services sub-programme is a concern given the set priority of improving
the services rendered to military veterans.
The Department must submit to Parliament a detailed report on the
measures in place to improve the well-being of military veterans as well as the
proportion of the budget dedicated to this during the third term.
The Committee notes that the 2007/08 budget allocation to the Reserve Direction
sub-programme was under spent, hence the decrease in its allocation for the
current financial here. It is recommended that the any unspent funds be
ring-fenced to ensure proper utilisation, in future.
The Department should submit to Parliament a report on the State of the South
African Army during the third term. The decrease in the allocated budget to
this programme may impact on the objective to modernise and renew the landward
forces.
The Department of Defence should submit to Parliament a progress report on the
following matters during the third term:
The result of qualification trials necessary for accepting the Gripen light
fighter aircraft into service;
The life cycle costs of the new equipment;
The establishment and adaptation of the infrastructure to support this new
equipment.
The
Department should submit a progress report on efforts made to mitigate the
impact of limited available funding on the SA Navy’s ability to meet the life
cycle costs of the new equipment and to establish and adapt the infrastructure
to support the new equipment. The
Department should report during the third term.
The Committee notes the deteriorating conditions of hospitals and facilities.
The Department should brief the Committee on the progress made in the upgrade
of these facilities during the third term.
The Department should clarify whether the increased remuneration of health
professional curbed the exodus of skilled professionals. This information to be
submitted to Parliament during the third term.
The Department should submit the following progress reports to
Parliament during the third term:
Progress made in the recruitment and retention of critically skilled personnel;
Progress made in the reconstruction of the Defence Intelligence Headquarters.
The
Department should brief the Committee on the state of ammunition in the SANDF
on 11 June 2008. During a previous interaction, the Department identified that
the risk of unstable and unsafe ammunition still exists. This briefing should
also include information on the progress made in the disposal of obsolete
ammunition as well as the safety and environmental impact of the existence of
ammunition depots close to communities.
The Committee notes the unauthorised expenditure on force employment as
highlighted by the Auditor General. The Committee recommends that the
accounting officer of the Department of Defence, must, in consultation with the
Department of Foreign Affairs and the Minister of Defence supply a report on
this matter.