Report
of the Portfolio Committee on Finance on Budget Vote 11 (Statistics South
Africa), dated 28 may 2008
The Portfolio
Committee on Finance having been briefed and deliberated on the Budget Vote 11
and the Work Programme 2008/09 – 2010/11 of
Statistics South Africa (StatsSA) reports as follows:
1. INTRODUCTION
On 23 May 2008 the Deputy Minister of Finance, Statistician-General, and
senior officials from StatsSA briefed the Committee
on the Work Programme 2008/09 – 2010/11. StatsSA outlined its key priorities for 2008/09 in line
with its strategy.
According to the 2008/09 – 2010/11 Work Programme, StatsSA’s legislative mandate relates to providing the
state with information about the economic, demographic, social and
environmental situation in the country. In the introduction to the
presentation, the Statistician-General elaborated on the strategic importance
of statistics. According to the Statistician-General, statistics provided by StatsSA help policy-makers in evidence-based decision
making, managing results, deepening transparency, and for broadening and
deepening democracy. The strategic importance attached to statistics is also emphasised in the 2008/09 – 2010/11 Work Programme. Specifically, the Work Programme
points out that the availability of comprehensive, relevant, timely and
accurate statistical information is crucial for effective policy making,
development planning and decision-making, as well as for monitoring and
evaluating.
This report consists of different sections. Section 2 gives an overview of the
key priorities of Stats SA for the 2008/09 financial year. Section 3 provides
details of Stats SA’s strategic risks and challenges,
and an overview of what is envisaged beyond 2008. Section 4 provides a summary
of questions by members of the Committee and responses.
2. KEY PRIORITIES
The Statistician-General gave an overview of the key priorities of StatsSA with a discussion on the characteristics of a
statistical organisation, the role of statistics
towards evidence based decision-making and the critical societal issues and how
statistics relate to them. According to the Statistician-General, the
characteristics of a statistical organisation include
the following:
Intellectual;
Technological;
Political;
Logistics; and
Administrative.
These characteristics form the basis for the effective functioning of StatsSA and the Statistician-General made it clear that
each characteristic carries an equal weighting. As mentioned above, statistics
are needed for evidence based decision-making. In other words, the quality of
statistics informs the quality of decisions that are being made. Society needs
basic macro economic and social information to inform decision making in both
the public and private sectors. Key macro economic and social information could
include details of economic growth, price stability, employment and job
creation, life circumstances, service delivery, poverty and demographic
profiles, and population dynamics. Providing reliable information is perhaps
more important today than in the past, specifically in light of changes in
interest rates, increasing food prices, labour market
dynamics and the fight against poverty.
The following are the key priorities of Stats SA for 2008/09:
Quarterly Labour Force Survey;
Living Conditions Survey;
Reweighted CPI;
Reviewing of Producer Price Index;
Geo-referenced dwelling frame;
National Strategy for Development of Statistics; and
International activities and the International Statistics Institute (ISI).
2.1 Quarterly Labour Force Survey
The aim of the Quarterly Labour Force Survey is
to comprehensively measure the dynamics of the labour
market. The Labour Force Survey is the primary
instrument to measure employment. Re-engineering the Labour
Force Survey started in 2006. The Statistician-General pointed out that data
collection on the Quarterly Labour Force Survey were
initiated in January 2008. The improvements with the new Quarterly Labour Force Survey include reviewed concepts and
definitions of key indicators, frequency, timeliness, redesigned questionnaires
and processes. According to the Statistician-General, the first results of the
Quarterly Labour Force Survey will be published in
August 2008, and from then on results will be published on a quarterly basis.
The Quarterly Labour Force Survey will provide
details of seasonal variation, which will help to inform policy makers.
2.2 Consumer Price Index (CPI)
The aim of the CPI is to measure price changes as experienced by consumers
over time. The Statistician-General pointed out the 2005 Income and Expenditure
Survey provided key inputs in the new weightings for the CPI basket. The 2005
Income and Expenditure Survey used a diary method whereby respondents were not
seen for one day only, but rather over a period of 12 months. This provided
useful information on consumer spending patterns. StatsSA
is currently running a parallel sample on new products. The new weights for the
reweighting of the CPI will be published by June
2008, while the reweighted CPI will be released in
February 2009.
2.3 Producer Price Index (PPI)
The PPI shows monthly movement in prices of producers for a part of the
economy (excluding services). The PPI has last been reviewed and reweighted in 1999. According to the Statistician-General,
the effect of not reviewing the PPI series over the last 10 years is that an
outmoded product classification and basket of goods have emerged which is
unreliable. The Statistician-General also pointed out that during the reweighting, unexpected problems occurred. The
Statistician-General concluded by stating that the PPI is on a stable footing
this year.
2.4 Living Conditions Survey
According to the 2008/09 – 2010/11 Work Programme,
the aim of the Living Conditions Survey is to measure the extent and
distribution of household poverty and monitoring the progress in poverty
reduction. The Statistician-General made it clear that measuring poverty should
take on a multidimensional approach. StatsSA has
engaged with the relevant stakeholders and is in the process of finalising the survey instrument and methodology. As the
2008/09 – 2010/11 Work Programme points out that the
survey will be conducted in collaboration with other public policy initiatives
that include stakeholders such as the Department of Social Development,
National Treasury, the Presidency, and institutions undertaking other
government commissioned studies. The
survey will take place over a 12-month period and data collection will commence
in November 2008. The 2008/09 – 2010/11 Work Programme
states the results will be available in 2010.
2.5 Geo-referenced dwelling frame
According to the Statistician-General, the aim of the Geo-referenced
dwelling frame is to compile a complete, up-to-date database of all dwellings
and other structures in the country. Understanding geographical statistics is
important as it helps us in understanding the dynamics of geographical settings
in terms of investments, service delivery, etc. The Statistician-General
pointed out the need to compile an up-to-date list of all dwellings and
structures in
2.6 National Statistics System (NSS)
According to the 2008/09 – 2010/11 Work Programme,
the adoption of common concepts, definitions, classifications and standards is
the cornerstone of statistical coordination in the NSS. The 2008/09 – 2010/11
Work Programme points out that one of the strategic
objectives of the NSS is developing a National Strategy for Development of
Statistics (NSDS). StatsSA has prioritized the
development of the NSDS to provide a framework for building and sustaining
capacity to produce national statistics fit for use according to defined
quality standards. According to the Statistician-General, the NSDS is to be
compiled in consultation with other stakeholders. Stakeholders will be trained
in the South African Statistical Quality Assessment Framework. The priorities
in terms of statistical support differ as follows across national, provincial
and municipal levels:
National level: Education, Health and Home Affairs;
Provincial level: Provincial profiles; and
Municipal level: Raising awareness of statistics.
It is envisaged that a draft NSDS will be available by March 2009.
2.7 International activities and the International Statistics Institute (ISI)
StatsSA will host the 57th
session of the ISI during August 2009. In the 122-year history of the ISI, it
will be the first time that a sub-Saharan country hosts this session. The ISIbalo Capacity Building Programme
has been developed as a principal activity of the 57th
Session of the ISI. The ISIbalo Capacity Building Programme has specific objectives, which are as follows:
Facilitating the broader participation of Africans at the ISI 2009;
The development of segmented cadres of statisticians and demographers in
Africa;
Developing statistical education in Africa;
Promoting research in science with a fragmented history of African achievement;
and promoting statistical utilization in Africa for evidence based policy
making and creating a diverse range of sharing best practice.
3 STRATEGIC RISKS AND CHALLENGES
The Statistician-General provided the following list of strategic
challenges and risks facing StatsSA:
Data Management and Information Delivery project;
Business register;
Building leadership and management capabilities;
Strengthening analytical and methodological capabilities;
Corporate data processing;
Integrated fieldwork; and
Relocating Stats SA.
In addition to these strategic challenges and risks, Stats SA will be focusing
on the following key issues over the period:
Benchmarking Gross Domestic Product;
Living Conditions Survey;
Statistical Training Institute;
ISI in 2009;
Census 2011;
New buildings in Tshwane; and
Climate change.
In concluding the presentation, the Statistician-General highlighted the
following key points:
For the first time, comprehensive employment data will be available on a
quarterly basis;
Information will be readily available on the changing consumption patterns in
the economy; and
For the first time, a comprehensive and integrated poverty profile is on its
way through the Living Conditions Survey.
4. Committee deliberations
Having deliberated and sought clarity related to the 2008/09 – 2010/11 Work
Programme, the Portfolio Committee on Finance raised
concerns on:
National Business Register;
Release of quarterly GDP figures;
Capacity to measure GDP from the expenditure side;
Additional personnel, staff competency and skills;
Relationship with other Departments;
Producer Price Index (PPI) and Consumer Price Index (CPI) statistics;
Lags of statistical process;
Poverty Index;
Measurement of non observed economy;
Adequate accommodation for 2010;
Choosing of measurements;
Non profit organisations;
Demographic shifts;
Public image of StatsSA;
Self employed survey;
Zero rating of food stuffs;
Responses.
In response to the question on the business register, StatsSA
indicated that it is an inter-departmental and inter-disciplinary matter that
does not hang on the capacity of StatsSA but relates
to some of the key departments. It also relates to the provisions of the
Companies Act. Various stakeholders are obligated to provide the necessary
information to complete the business register. StatsSA
is in the process of addressing this issue as it will improve the capacity of
SARS to generate the different revenue resources and provide accurate
projections.
In terms of the Gross Domestic Product (GDP) and its relevance to the economy, StatsSA reported that GDP is an important factor to provide
data on a quarterly and annual basis. Quarterly data is important because it
allows policy and decision–makers to make short-term decisions. Currently the
entire economy is covered in GDP. The challenge lies with the generic services
sector and the overall estimate of the services sector. Transport,
communication and manufacturing were chosen, because of their importance to the
economy and the fact that these sectors are easier to measure.
StatsSA highlighted that
Regarding recruitment, StatsSA has put in place
capacity building programmes and internship programmes to attract more people. StatsSA
is also communicating to professional organisations
to assist in acquiring certain skills.
Bursaries have been offered to matriculates to obtain certificates,
diplomas and degrees. A retention
strategy, that will be finalised this year, has been
put in place to retain employees.
StatsSA has undertaken partnerships with tertiary
institutions over and above in-house collaboration and in-house training that
will ensure that
StatsSA interact with other departments to the extend of the National Account of Natural Resources. The
issue of climate change as a measurement has only emerged from the UN
Statistics Commission. Although Statistical measures on these will take one to
three years, some countries have already conduct studies on how to measure
climate changes.
Regarding the PPI, Stats SA highlighted that the PPI is an indicator for 30 per
cent of the value added of the economy. One critical challenge that StatsSA faces is how well it educates and communicates
users about a number of problems and issues that it has. In moving from the old
to the new transition some unanticipated complexities arises. When a series exists
that has not been change for some time, it becomes less relevant to the economy
because of the change of dynamics in the economy. New and international
classifications have been introduced and products are classified differently.
The PPI is far more complex than the CPI. For the CPI, StatsSA
has enumerators that on a monthly basis collect prices from stores. StatsSA has control over this process whereby enumerators
have to give the price in at a certain day. StatsSA
is dependant on firms where it comes to the PPI. This is a series where StatsSA collects information for two weeks and 2/3 days
after collection process the information. Information in terms of data that
some firms provide may be incorrect. When StatsSA
released the PPI, it had indicated there were certain problems which would be
resolved and that revisions could be expected.
In the case of the Consumer Price Index (CPI), StatsSA
is totally cautious because the CPI is based on wages, which is a key input
into monetary policy. The resources that are put into the CPI are about five
times more of what is put into the PPI. A lot of energy and effort has been put
on the CPI.
Time lags differ from size and burden per survey. For example when the
statistics on the Community Survey were collected in February 2007, it was only
released in October 2007. The survey could not include the level of
municipalities, which was release by March 2008. In terms of the re-engineering
of the QLSF, release will only commence four weeks after collection of each quarter.
The DHS was release nine months after the data was collected. The Living Conditions Survey will be a
continuous survey, but the collection of data will be concluded at the end of
October 2009. As this is a continuous
survey, the data processing will go alongside the data collection and will be
released after April 2010. Migration data will be released on a monthly basis,
but it would be the month of the previous year. Mortality data will be released
every year. The mortality data for 2007 will be released in 2008. The time lag
will be determined by the amount of work of data collection.
Regarding the poverty index, StatsSA reported that
progress has been made and that the technical work is almost concluded. Policy
discussions will have to begin, however, poverty is multi-dimensional in terms
of absolute poverty, relative poverty and perceptions around poverty that are
critical and important. StatsSA is confine with
absolute poverty, that is measurable and also the relevant measure. The poverty
survey will take into account relative poverty. The poverty index is based on
the minimum food need for daily requirement. Within this there would be a
threshold above and below that would be determined as the poverty line.
The Millennium Development Goals are one of the objectives that have been
embraced by
Regarding the non-observed economy, StatsSA indicated
that although this is a very complex area to measure, estimates from some
countries are based on an inverse of what the police are able to capture and
could be calculated 20 times the value in the non existing economy. The
statistical system that economic statistics relies on is the business register,
labour force survey and to some extend, the income
and expenditure survey. Tracking illegal activity for publishing has to be
estimates and cannot be official due to the nature of the activity.
With respect to accommodation, StatsSA reported that
it had released the previous day figures of growth in the accommodation sector,
not in the number of houses, but in the revenue that it has generated.
March-to-March growth indicates about 38 per cent. There are also increases in
the volumes of people that are using accommodation.
Regarding how systems are chosen, StatsSA indicated
that it is moving into operation efficiency and operation effectiveness. During
the past five years, StatsSA had position itself
through addressing the kind of problems around the data sets it had. Operation
efficiency and effectiveness will depend how well the systems are harmonised and how well the structure responds to it. In
order to achieve this, StatsSA had realised the need to expand the management and other
layers. This could be achieved through the approved structure. At a provincial
level, the structure had been elevated to that of a chief director. There is
also a programme manager that deals with the
difficult issues of integration. Officials from StatsSA,
on a rotational basis, will attend intense training on fieldwork in Istak during this year. Simultaneously, a training programme has been developed to train field operators.
There is also clear review with the assistance of international experts when
decisions are taken. International peer review and user groups were second
factors, which determine how to measure.
Regarding non-profit organisations, StatsSA responded that the effectiveness of these
institutions depend on how it contribute to GDP. In
Regarding demographic shifts, StatsSA highlighted
that Gauteng and Western Cape were previously not
only labour receiving provinces but are now also
children receiving provinces. This is because children migrate with
their parents to
In
StatsSA reported that its public image is largely
affected by the contested views when the statistics are produced. The corporate
and public image will also be affected by the scientific nature and trust in
official statistics, internal practices within StatsSA
and the history of the organisation that operated
without a communication unit. StatsSA engage, train,
and work with journalists on certain events during lock-up sessions. Service
providers have been appointed to train senior staff members on how to deal with
the media. This has resulted in an improved relationship with journalists.
Regarding the self-employed survey, Stats SA indicated that it had concluded
two surveys; one in 2002 and the other in the 1990’s. The results of the size
of government intervention were, as reported by the self-employed are far less
(loans) of what they received from informal companies to start their
businesses. Seventy five per cent of small businesses that were created
received money that they borrow from friends or raised by their family. Both
surveys indicated that less that half a per cent traces what government schemes
might be.
With respect to zero rating, StatsSA reported that it
had observed overtime that the increase in cents per litre
in petrol, paraffin and diesel as of 1997, 1998 and 1999 were higher for
paraffin. Government adopted a policy in 2000 to zero rate paraffin. The
benefit, however, was not passed to the beneficiaries. When prices increase per
cents per litre it increases more for paraffin. The
community survey indicates the percentage of population that uses paraffin for
cooking and lighting. StatsSA supply the statistics
and evidence, but requires policy to deal with policy options that are at the
disposal of government.
5. Recommendations
Based on the deliberations with Statistics South Africa on the Work Programme 2008/09 – 2010/11, the Committee recommends that:
StatsSA provides a detailed report to the Committee
on progress made towards rectifying its public image;
StatsSA provides a detailed report to the Committee
on progress made towards achieving targets as outlined under each key priority
for 2008/09; and
StatsSA to timeously inform
the Committee of any statistical information that could have a negative impact
on the economy.