Report of the Portfolio Committee on Finance on the Appropriation Bill [B5-2009] (National
Assembly – sec 77), dated 18 February 2009:
The Portfolio
Committee on Finance, having considered
and examined the Appropriation Bill and its related documents, referred to it,
and classified by the JTM as a section 77 Bill, reports as follows:
Introduction
The Minister of Finance, henceforth the Minister,
tabled the 2009/10 Medium-Term Expenditure Framework (MTEF) budget[1]
in the National Assembly on 11 February 2009. Following the tabling of the
budget, the protocol is that the Portfolio Committee on Finance allows for
submissions to be made in response to the tabled budget. These submissions are
in the form of budget hearings[2]
with various stakeholders.
This report gives an overview of the 2009/10 Budget
main themes. The engagements with various stakeholders through the budget
hearings and submissions form part of this overview. The report consists of five
sections. Section 1 gives an overview of the macro economic environment within
which the budget was tabled. An overview of the current macro economic
environment is important as developments in this broad environment to a large
extent inform the scope and content of the budget. This section makes reference
to a number of key macro economic indicators. A budget can be regarded as an
instrument which reflects the priorities of a specific department or programme.
In the 2009 Budget, the primary priorities/objectives are outlined as follows:
·
Protect the poor;
·
Build capacity for
long-term growth;
·
Sustain economic
growth;
·
Maintain a
sustainable debt level; and
·
Address sectoral
barriers to growth and investment.[3]
In order to give
meaning to this section of the report, an understanding of the above priorities
is important within the context of the current macro economic framework. Section 2 focuses on the fiscal policy framework as
set out in the budget. Section 3 gives a summary of the main revenue trends and
tax proposals underlying the 2009 Budget. This section places the emphasis on
how tax proposals affect individuals and businesses. This section also gives an
overview of tax proposals which fall outside of the two broad categories of
individuals and businesses. Section 4 draws conclusions, while section 5
highlights recommendations made by the Committee.
1. Macro economic outlook
It is important to
note that the hearings took place within the context of the deepening
international financial crisis. In the 2008 Budget Review, the Minister made
reference to the credit crunch and volatile financial markets. In tabling the
2008 Medium-Term Budget Policy Statement, the Minister mentioned that the
prospects for global growth are poor and that the short-term outlook is clouded
by uncertainty.[4] In its presentation
to the Committee, National Treasury pointed out that over the last twelve months;
the global economy has shown a sharp deterioration. Evidence of this is in
recent reports published by the International Monetary Fund on the World
Economic Outlook. Whereas reports on the World Economic Outlook are usually
published twice a year, economic growth projections have become so volatile
this year that the World Economic Outlook has over the last ten months been
published five times.
According to National
Treasury, macroeconomic conditions have become more difficult as investment
flows to emerging markets have dried up and the cost of capital on global
markets became prohibitive.[5]
In its presentation to the Committee, National Treasury pointed out that the
major areas of concern in the macro economic environment are export volumes,
falling manufacturing output and a slowdown in private investment.
In the introduction of his presentation before the
Committee, Mr. J. Laubscher, Group Economist at SANLAM[6],
stated that taking into account the current macro economic landscape, the
tabled budget can be regarded as a pragmatic response to a challenging
environment over which South Africa has little control. In this way Mr Laubscher
pointed out that National Treasury did a good job in balancing the immediate
need with the longer plan that goes into fiscal planning. Essentially
therefore, the budget according to Mr Laubscher confirms that it is an outcome
of government priorities.
1.1. Key Macro economic indicators
1.1.1.
Gross
Domestic Product (GDP) growth
The global economic crisis has
resulted in a significant deterioration in
Figure
1: GDP growth, selected countries and regions, 2008 – 2009
Source: National
Treasury (2009a)
The panel of economists also commented on
According to Laubscher (2009),
1.1.2.
Current Account
Deficit
The Budget Review revealed significant downward
revisions for the next three years to National Treasury’s projections for the
current account deficit. The Budget Review (2009) states that the reason for
the increase in the current account deficit as a percentage of GDP from 2007 to
2008 could be found in the widening gap between savings and investments. National
Treasury projects the current account deficit to be at about 6.7 per cent over
the medium-term.
Despite the projection of a lowering current
account deficit, National Treasury pointed out that the management of the
current account deficit is subjected to ongoing risks from the global financial
crisis. In this regard, National Treasury stated that the increase in the
current account deficit during the fourth quarter of 2008 was as a direct
result of outflows from the equity markets.
Mr Laubscher pointed out that net private flows
have decreased significantly to emerging markets. Furthermore, Mr Laubscher
made the point that portfolio investments as a component of equity investment
have also decreased. In addition to these direct capital outflows, National
Treasury also pointed out that growing service and income payments to international investors, in part
due to higher dividend and interest payments arising from strong capital
inflows have also been a source of pressure on the current account.[9]
Ms Moola
predicts the overall deficit to be at 4.5 per cent of GDP by the end of 2009.
This is particularly due to a possible World Bank loan to Eskom amounting to
US$5 billion. In the presentation to the Committee, Mr Laubscher pointed out
that during January 2009, international capital flows to
1.1.3. Gross fixed capital investment
The South African economy has experienced an increase in
gross fixed capital investment over the 2006 and 2007 financial years. The 2008
Budget Review stated that gross fixed investment will average at about 10 per
cent over the 2008/09 MTEF. According to National Treasury, there will be a
steep fall in the growth of gross fixed capital investment over the next three
years. The forecast for gross fixed capital investment/formation is at 3.7 per
cent for 2009 from a revised estimate of 11.5 per cent for 2008. The largest
component of the slower growth in gross fixed capital investment over the MTEF
will be from public sector corporations and general government. The sectors in
which much of the capital formation will occur will be in electricity and
transport.
1.14 Inflation
From January 2009 the new
target measure for inflation will be headline CPI – this measure is replacing
CPIX. According to National Treasury (2009a), CPIX inflation averaged 11.3 per
cent during 2008. National Treasury is of the opinion that lower oil and food
prices, coupled with weak local demand, will bring inflation back to within the
targeted range of 3 – 6 per cent.
Ms Moola agrees with National
Treasury. However, as Ms Moola stated, a drop to within the targeted range is
too optimistic a prediction for the first two quarters of 2009. BUSA links the
impact of the global financial crisis with the current monetary policy
framework. According to BUSA, the current monetary framework has provided a
solid anchor for inflationary expectations. FEDUSA also commented on price
stability. According to FEDUSA, it is unlikely that the announced expansionary
fiscal and monetary policy will lead to higher inflation at present. FEDUSA
however cautioned against becoming too optimistic about inflation moving within
the target range. FEDUSA is of the opinion that oil price volatility and
exchange rate movements can quickly push the headline CPI beyond the targeted
range.
1.1.5
Real output trends
A series of economic shocks had a detrimental effect on
South African producers during the first nine months of 2008. These, according
to National Treasury, included the following:
·
Electricity shortages;
·
Rising input costs;
·
Higher interest rates; and
Slowing demand.[10]
Figure 2 provides an overview of the growth in real value
added by sector, 2007 – 2008.
Figure 2: Growth in
real value added by sector, 2007 - 2008
Source: National Treasury (2009a)
The following can be deduced[11]
from Figure 2:
·
Agriculture was the best-performing domestic economic sector in the
first nine months of 2008, with growth of 14.6 per cent compared with 2.3 per
cent in the same period in 2007;
·
Mining output fell by 6.9 per cent in the first 11 months of 2008, with lower
production of diamonds, copper, nickel, gold and platinum group metals; and
·
The growth in manufacturing output fell below 3 per cent in 2008. Output slid
sharply on the electricity crisis in the first quarter of 2008, followed by the
rapid deterioration in global and household demand.
Ms Moola commented on the
fall in output in the mining and manufacturing sectors by stating that almost
270 000 people will lose their jobs in these sectors as a result of slower
growth.
2.
Fiscal Policy
National Treasury
introduced the Fiscal Policy section of their presentation to the Committee
with a statement that “public finances are under pressure”. This according to National
Treasury manifests itself in the under collection of revenue to the amount of
R14 billion for the 2008/09 financial year. For the 2009/10 financial year, the
revenue amount according to National Treasury is revised downwards by R50
billion.
National Treasury
pointed to two potential risks to the revenue forecast. These are a possible
fall in company taxes (i.e. taxes received from profits on taxes) and a decline
in VAT receipts as a result of slower domestic demand.
According to National
Treasury, an amount of R57 billion is added to the baseline which changes the
balanced budget to a deficit of R95.6 billion.[12]
The growth in
government spending in the present context serves two broad purposes.[13]
Firstly, it ensures that the implementation of long term service delivery
priorities is not
negatively affected by
lower growth in revenue collection.[14]
Instead of being forced to cut back on allocations when faced with lower revenue,
government is able to devote greater resources to priority expenditure.[15]
Secondly, by expanding government’s contribution to the economy, the fiscus is
able to support economic activity at a time when global and domestic demand is
faltering.[16]
FEDUSA
considered the formulation of fiscal policy within the current economic
context. According to FEDUSA, the current circumstances require an expansionary
fiscal policy stance, in other words lowering of taxes and increasing
expenditure. FEDUSA is of the opinion that there should have been a better
balance between tax reduction and an increase in expenditure. IDASA commented
on the common pitfalls in implementing fiscal policy. Specifically, IDASA
cautioned that in order for government to achieve its fiscal policy objectives,
unevenness of capital spending by government departments should be addressed -
unevenness in government spending related to uneven spending and the tendency
to spend late in the year.
2.1 The Budget deficit
In delivering his Budget Speech, the Minister mentioned that
the consolidated
government budget deficit rises to 3.8 per cent of GDP in 2009/10 before
moderating to 1.9 per cent by 2011/12.[17]
Looking back to the 2008 MTBPS, the likelihood of a higher deficit was already
clear then. The 2008 MTBPS projected a budget deficit of 1.6 per cent of GDP
for 2009/10, in order to maintain a real increase in expenditure from the
2008/09 to the 2009/10 budget.[18]
The projected deficit is primarily a consequence of lower revenue estimates and
higher spending. According to Ms Moola, the main reason for the deficit is the
decline in government revenue.
From
a spending perspective, Ms Moola pointed out that a substantial increase in
spending by parastatals also contributed towards the budget deficit. Moola
further pointed out that over the next three years there will be massive increases in infrastructure
spending plans. This will be totalling 1.2 per cent of GDP per annum over the next
3 years. IDASA pointed out that since the deficit will have to be
financed,
it is important to see a strong commitment to investment in infrastructure and other physical
assets which will promote growth recovery and the ability of the fiscus to
service loans and repay debt stock.
BUSA
also commented on the budget deficit by stating that the current economic
challenges require pragmatism. According to BUSA, a
counter-cyclical budget framework allows for government to run a surplus during
periods of economic growth and deficits during downturns. In BUSA’s view, the 3.8 per cent budgeted
deficit whilst higher than their preferred level, can be supported if
accompanied by a clear and sustainable path to a return to balanced budgeting. FEDUSA
came out strongly in defense of the budget deficit. According to FEDUSA, the
announced higher budget deficit of 3.8 per cent is defendable – specifically,
the more accommodating fiscal stance in this year’s budget to dovetail with the
lower interest rates announced by the South African Reserve Bank recently is
the correct option.
Mr Laubscher posted a more pessimistic view of the budget deficit
and its consequences. Mr Laubscher warned that if savings and the
budget balance are to remain negative, then government will in effect be
borrowing money to pay interest on its debts. Mr Laubscher pointed out that
with the debt to GDP ratio rising to 27 per cent by the end of the three-year
medium-term period, the country could face serious problems if the deficit
continues to rise.
The concept of a structural
budget balance[19] was
introduced during the 2007 MTBPS. A comparison between the structural and
actual balances is introduced in Figure 3. Based on Figure 3, the actual and
structural balances were both in negative territory up till 2005/06. This
situation changed in 2006/07 when the actual balance moved into positive, i.e.
surplus. The structural balance remained in deficit.
The Minister stated
in his 2008 Budget speech that the actual balance
would remain in surplus of around 1 per cent of GDP until 2011, while the
structural balance would be in deficit of around 0.6 per cent over the same
period. This position has however
changed
considerable as Figure 3 points out – Figure 3 shows how significant budget
balances have changed since the 2008 Budget Speech. This significant change can
be attributed to the fact that while key commodity prices have fallen the prices of
BUSA
complemented the Minister on the counter-cyclical budgeting framework in
Figure 3: Main budget and structural budget balances, 2000/01
– 2011/12
Source:
National Treasury (2009a)
2.2
The Public Sector Borrowing
Requirement[22]
In
its presentation to the Committee, National Treasury outlined that the
worsening budget balance has resulted in an increase in the Public Sector Borrowing
Requirement. The Public Sector Borrowing Requirement is set to further increase
as a result of rising borrowing by State Owned Enterprises to finance their
capital investment programmes. National Treasury is of the opinion that while
borrowing for capital expenditure (especially among the non-financial public
enterprises) will continue beyond 2011/12, the recovery in the national
government balance will lead to an overall reduction of the public sector
borrowing requirement from 2010/11.[23]
Figure
4 speaks to changes in the Public Sector Borrowing Requirement. According to
Figure 4, the Public Sector Borrowing Requirement is forecasted to increase
during 2009/10 and decline during the remainder of the MTEF. According to National
Treasury, the prominent drivers contributing to the increase in the Public
Sector Borrowing Requirement include the Gautrain loan of R4.2 billion and the
R60 billion loan to Eskom.
In
his Budget Speech, the Minister stated that the high
Public Sector Borrowing Requirement would provide a substantial fiscal boost.
"We are borrowing not to rescue failed banks or to artificially delay the
restructuring of our industry and trade, but to construct the roads and power
stations, the classrooms and hospital wards, to modernise technology and
transform public service delivery, as the foundations of growth and broad-based
development in the decades ahead."[24]
Ms Moola pointed out that the Public Sector Borrowing Requirement at 7.5 per
cent of GDP is massive.
Figure
4: Public sector borrowing requirement as a percentage of GDP, 2005/06 –
2011/12
Source:
National Treasury (2009a)
5. Revenue trends and tax proposals
The tax proposals introduced in the 2009/10 budget aim
to achieve various tax policy objectives. These were highlighted by National
Treasury in their presentation[25]
to the Committee. The tax policy objectives include the following:
·
Protecting the
environment for future generations;
–
Green tax budget to
support environmental initiatives;
–
Main aim is to
change behaviour, as not significant from revenue perspective:
–
Promote sustainable
development, energy efficiency and investment in new technologies:
·
Boosting household
confidence, via Personal Income Tax (PIT) relief;
–
Fiscal drag and
real tax relief, change in brackets, primary rebate and some thresholds
•
Supporting mining
and private sector investment; and
–
Delay in
implementation of the Mineral and Petroleum Resources Royalty Act (2008) until
2010
–
2008 industrial
policy tax incentives implemented in 2009
•
Raising sufficient
revenue as economy slows down
BUSA regards the tax policy objectives as appropriate.
BUSA is particularly supportive of the focus on boosting household confidence
and assistance to the mining sector. In its introduction of its presentation to
the Committee, Price Waterhouse Coopers (PWC) welcomed the fact that National
Treasury did not propose too many changes. According to PWC, the focus during
2009 should be on the correction of technicalities and unintended consequences.
PWC further highlighted the complexities of the South African tax system.
This year’s tax proposals
are intended to meet the requirements of the fiscus while supporting consumer
and business confidence in the context of a weakening economy.[26]
It is estimated that the main budget revenue (after
accounting for tax proposals) for the 2009/10 financial year will amount to
approximately R642 billion. The proposals bring tax relief for households,
while certain proposals are aimed at addressing environmental concerns. In
quantitative terms, the tax proposals as it relates to individuals translate
into tax relief amounting to R13.6 billion.
BUSA welcomed the substantial relief granted to
individual tax payers as it will also benefit businesses conducted as
partnerships and sole traders which tend to be at lower income levels. In addition to welcoming the tax relief for
individuals, FEDUSA argues that the tax payers should be fully compensated for
bracket creep[27],
i.e. wage inflation.
Table 1 gives an overview of the estimated gross
revenue to be collected during the 2009/10 financial year by the SARS. It also
shows the deviation between the budgeted estimates and the revised estimates
for the 2008 financial year. A significant deduction from Table 1 relates to
the deviation in VAT revenue. For the 2008 financial year, VAT revenue is
revised downwards as a consequence of slower
domestic demand. According to Table 1, revenue to be
collected from individuals is estimated to come to 35 per cent during 2009/10.
The second highest category is for VAT (28 per cent).
Table 1: Tax
revenue trends
Source: National Treasury (2009c)
Commentators to the
tabled budget responded differently to the various tax proposals. In their
submissions, the commentators responded selectively to the tax proposals. The
next section provides an overview of the proposals.
5.1. Tax proposals
5.1.1 Environment
Fiscal Reform
According
to National Treasury (2009d), climate change requires both global and domestic
policy responses. In his Budget Speech, the Minister mentioned that it is
important that we should encourage South African companies to take advantage of
the clean development mechanism established in the Kyoto Protocol.
In
its presentation to the Committee, FEDUSA cautioned against the effects of tax
measures related to environmental reform being too complicated.
Incentives for cleaner
production – energy efficiency
Current
legislation provides for a three year 50:30:20 per cent accelerated
depreciation allowance for investments in renewable energy and bio fuels
production. National Treasury proposes that investments by companies in
energy-efficient equipment should qualify for an additional allowance of up to
15 per cent on condition that there is documentary proof of the resulting
energy efficiencies (after a two- or three-year period), certified by the
Energy Efficiency Agency.[28]
BUSA is of the opinion that the proposed additional allowance of up to 15 per
cent in respect of energy-efficient equipment may also be valuable, but runs
the risk of being bogged down by bureaucratic certification
conditionalities.
Plastic bag levy
SARS
introduced the levy on plastic shopping bags at 3 cents per bag in 2004/05.
National Treasury proposes that together with the agreement between government
and the retail sector to charge for such bags, this levy has helped to reduce
waste. It is proposed to increase the levy to 4 cents per bag from 1 April
2009.[29]
In its presentation to the Committee, BUSA called for more intensive
consultation with affected business ahead of implementation – BUSA believes
that they are in the best position to assess market behavioural dynamics and
logistics around implementation.
Taxation of incandescent
(filament) light bulbs
National Treasury proposes
the introduction of an environmental levy on incandescent light bulbs to
promote energy efficiency and reduce electricity demand is proposed. According
to National Treasury, these bulbs last longer, require five times less
electricity and result in lower greenhouse gas emissions.[30]
In quantitative terms, the recommendation by National Treasury is an
environmental levy of about R3 per bulb (between 1 cent and 3 cents per watt)
at the manufacturing level.[31]
5.1.2
Fuel levies
In
delivering his Budget Speech, the Minister mentioned that there has been and
still is a substantial increase in spending on maintenance and construction
under way, and we still face a heavy burden of road accidents and associated
compensation claims. According to the Minister, these are costs that have to be
covered.
National Treasury proposes
an increase of 23 cents and 24 cents per litre in respect of the general petrol
and diesel levies, and 17.5 cents in the road accident fund levy. According to
FEDUSA, the introduction of this tax proposal came at a very inappropriate
time. This, they argue, is in light of a time when there is a lack of
confidence in the economy and the disposable income of consumers is at a lower
level. BUSA believes that the steep increase in the general fuel levy is
nothing but a revenue raising strategy.
5.1.3 VAT proposals
Table 2 provides a summary of tax proposals as it
relates to VAT.
Table 2: VAT
proposals
|
VAT proposal |
Background |
Explanation of proposal |
|
VAT voluntary registration threshold |
According to National Treasury, the VAT refund
mechanism is an integral part of the VAT system but remains a major risk
area.[32] One important measure
implemented in 1999 was to deny businesses with an annual taxable supply turnover
below R20 000 the ability to register as VAT vendors.[33] |
National Treasury proposes an increase in the
threshold to R50 000 from 1 March 2010. |
|
False statements on VAT forms |
|
National Treasury proposes that false statements
on any VAT form submitted to SARS, not just returns, be considered an
offence.[34]
According to National Treasury this will serve as a deterrent to those who
seek to register for VAT without being eligible to do so.[35] |
|
Verifying applicants for VAT registration |
|
As an additional measure to combat VAT fraud, the
introduction of enabling provisions to permit the use of biometric measures
to verify the identity of applicants for VAT registration is proposed by National
Treasury.[36] |
Various commentators
responded to the VAT proposals. The South African Institute of Tax
Practitioners (SAIT) questioned the increase in the minimum turnover from R20
000 to R50 000. According to SAIT, small, start-up businesses that require a
VAT registration number in order to secure business, such as government
contracts, should be allowed to obtain this registration. Furthermore as SAIT
pointed out, this approach will assist businesses with getting on with their
business, by removing unnecessary administrative obstacles.
The
SAIT also commented that the process of meeting the legal obligation
(verification applicants for VAT registration) should be made reasonably easy.
In this regard, the SAIT suggests that there should not be additional verification
measures introduced in the form of finger-prints
5.1.4
Tax deductibility of
post-retirement medical contributions
Table 3 provides a summary of the tax proposal as it
relates to post-retirement medical contributions.
Table 3: Tax proposal in respect of
deductibility of post-retirement medical contributions
|
Proposal
and Background |
Explanation
of proposal |
|
Certain companies provide a subsidy towards medical aid for employees
after retirement. These contributions are deductible by the employer. General
Acceptable Accounting Practice requires the recording of such contributions
in the books of the contributor as a liability. In order to minimize
liabilities in its books, contributors prefer to settle these obligations to
former employees as once-off payments directly to their retired employees. |
National Treasury proposes that such contributions be deductible
immediately, not spread over a period of time.[37] The precondition is
that the company making such contributions must not derive any direct
benefits from such payments, nor will a return of the funds to the employer
or a redirection of the use of the funds be permitted.[38] |
5.1.5 Commentary
on other tax proposals
The SAIT expressed
disappointment in the fact that there is no additional tax relief for small
business. According to SAIT, equal tax relief should be granted to all forms of
business. PWC pointed out that their dissatisfaction remained with the 2nd
provisional tax payment.
BUSA commented on the current
corporate tax rate. According to BUSA, business would like to place on record
that the
decision taken in 2008 to reduce the corporate tax rate to 28 per cent was
indeed timeous and that its stimulatory effect helped to stabilize corporate
revenue to an extent. BUSA is of the
opinion that there should be a further reduction in the corporate tax rate.
According to SAIT, only 0.25 per cent of companies in
FEDUSA agreed with the Minister on the postponement of the
Petroleum Resource Royalty Act for implementation from 01 May 2009 until 01
March 2010. According to FEDUSA, the consequences of the global down turn in
economic activities probably justify such a move by National Treasury. BUSA is
of the opinion that there is a time and a place for ad hoc “emergency” relief
and sees the postponement of the implementation of the mineral and petroleum
royalties in this light.
6. Conclusion
The tabling of the
2009/10 Budget comes in the midst of global financial crisis. The effects of
the crisis are so severe that government needs to maintain prudent macro-
economic management to meet its various objectives. In light of the current global
slowdown, the 2009/10 budget balance falls into deficit. The budget deficit is
further enforced through the expectation that revenue collection will be
severely influenced by lower company profits and slower demand.
7. Recommendations
Based on the budget hearings, the Committee recommends that:
7.1 In the new
Parliament, the Portfolio Committee on Finance should request the South African
Airways to appear before the Committee on their additional allocation of R1.6
billion;
7.2 The Portfolio Committee on Finance should have a full
understanding of principles around the Division of Revenue Bill;
7.3 National Treasury should revisit issues around the wage
subsidy; and
7.4 National Treasury together with the relevant accounting
authorities should update the Committee periodically on the spending
performance of the R1 billion allocated to the Umsobomvu Youth Fund over the
MTEF.
8. Oral/Written submissions
The following
people made oral submissions before the Committee, some in their personal
capacity. These submissions are available on request from the Committee Section
of Parliament.
1. Mr T Manuel, Minister of Finance;
2. Mr N Nene, Deputy Minister of
Finance;
3. Mr L Kganyago, Director-General:
National Treasury;
4. Mr P Gordhan, Commissioner of the
South African Revenue Services (SARS);
5. Mr K Naidoo, Deputy
Director-General, National Treasury
6. Mr. I. Momoniat, Deputy
Director-General, National Treasury;
7. Mr. F. Tomasek, Chief Director, SARS;
8. Mr. C. Morden, Chief Director, SARS;
9. Mr J Laubscher, Group Economist:
Sanlam;
10. Ms N Moola, Economist:
11. Prof. O Mollagee, Director:
PricewaterhouseCoopers
12. Mr S Klue, Chief Executive: SAIT;
13. Ms G Humphries, Deputy General
Secretary, FEDUSA;
14. Prof R Parsons, BUSA;
15. Adv A Meiring, BUSA;
16. Mr R Baxter, BUSA;
17. Ms S Siwisa, BUSA; and
18. Mr L Verwey, Manager: IDASA
9. References
National Treasury. 2009a. Budget Review.
National Treasury.
2009b. Budget Speech.
National Treasury.
2009c. Presentation to the Portfolio Committee
on Finance,
12 February 2009.
National Treasury. 2009d. Tax proposals Budget Pocket Guide.
Government Printers.
National Treasury. 2008a. Budget Review.
National Treasury. 2008b. Medium-Term Budget Policy
Statement.
Government
Printers.
National Treasury. 2007. Technical note on the structural
budget balance
estimate,
Report to be considered.
3. Report of the Portfolio Committee on Social
Development on the Study Tour to
1. Introduction
This paper provides
a brief overview of social development strategies in
The Portfolio Committee on Social Development undertook a study tour to
Firstly, an overview of the
2. Delegation
1. Hon. TM Masutha,
Chairperson
2. Hon. DM
Morobi, ANC
3.
Hon. IW Direko, ANC
4.
Hon. HI Bogopane-Zulu, ANC
5.
Hon. KW Morwamoche, ANC
6.
Hon. LPM Nzimande, ANC
7.
Hon. BM Solo, ANC
8.
Hon. XC Makasi, ANC
9.
Hon. MM Gumede, ANC
10.
Hon. J Semple, DA
11. Hon.
H Weber, DA
12. Hon. C Dudley,
ACDP
Support
staff
1. Ms Zola Vice, Committee
Secretary
2. Ms Yolisa Nogenga, Content
Advisor
3. Ms Thabile Ketye,
Researcher
4. Ms Nozuko Mnyovu, Committee
Assistant
Assistants
to Members with disabilities
1. Mr Simon Zulu
2. Ms Nazli Petersen
3. Acknowledgement
The Portfolio
Committee on Social Development acknowledges the support of ARTH in sponsoring
the study tour to
3. Background/Context
Substance abuse is on the rise in
Substance abuse has
been associated with a number of risk behaviours. Alcohol and/or cannabis abuse
has been associated with sexual risk behaviours,[40]
including methamphetamine (well known as “tik” in
It is within this context that the Portfolio Committee on
Social Development identified drug and substance abuse as a critical focus area
for its oversight work. The aim of the
study tour was then, to investigate how substance abuse is dealt with in
The Committee also noted with
concern the global increase in the supply of drugs stating that trafficking
volumes have increased drastically and that
The objectives of
the study tour included the following:
·
Visiting
organizations and rehabilitation centres that are accredited to work with
people who are addicted to drugs and other substances.
·
Exploring
the composition and functioning of the Central Drug Authorities in
·
Exploring
Government policies, programmes and interventions implemented to fight
substance abuse as well as other social development issues.
4. Country
Profile/Demographics
Fig.1: Brazilian Region and States[45]
|
Region |
States |
State Capital |
|
|
South |
Rio Grande do Sul Santa Catarina Paraná |
Porto Alegre Florianópolis |
|
|
South-east |
São Paulo Rio de
Janeiro Minas Gerais Espírito Santo |
São Paulo Rio de
Janeiro Belo Horizonte Vitória |
|
|
Center- West |
Mato Grosso Mato Grosso do Sul Goiás Distrito
Federal |
Cuiabá Campo Grande Goiânia Brasília |
|
|
North |
Amazonas Acre Roraima Rondônia Amapá Para Tocantins |
Manaus Rio Branco Boa Vista Porto Velho Macapá Belém Palmas |
|
|
North-east |
Alagoas Sergipe Pernambuco Paraíba Rio Grande do Norte Ceará Piauí Maranhão |
Salvador Maceió Aracaju Recife João Pessoa Natal Fortaleza Teresina São Luis |
*The States that
were visited by the Portfolio Committee on Social Development are highlighted.
In
5. Substance Abuse
in
5.1 Drug trafficking
Drugs that are considered
to be from
Drugs that are
produced in
What does research show? [51]
Research shows that
Marijuana for local
consumption is both produced locally and imported from
Drug trafficking,
organized crime, poverty, and violence are closely linked in
Drug use is
considered a crime in
·
Warning
about the effects of drugs,
·
Community
service, and
·
Attendance
of an educational program or course.
Major crimes on drug trafficking:
Importing,
exporting, sending, preparing, producing, fabricating, acquiring, selling,
exposing to sell, offering, deposit taking, transporting, bringing along,
storing, prescribing, administering, delivering or providing drugs for
consumption, even for free, without permission or at discordance with a legal
or regulatory determination. The penalty
to those who commit the above-stated crimes is imprisonment of five to fifteen
years, and in addition a payment of a day fine.
When the crime
involves two or more people, repeatedly, a penalty that is imprisonment of
three to ten years and including a payment day fine is issued.[52]
5.2 Substance abuse interventions[53]
·
To
promote, orient and propose legislation to ensure the implementation and
monitoring of policy actions.
·
To
create the National Public Policies System on Drugs (SISNAD) that establishes
measures to prevent substance abuse.
·
To
re-integrate drug dependents and users into their societies, through assisting
them with meeting their basic needs.
·
To
establish rules for law enforcement measures on illegal production and illicit
trafficking of drugs.
5.2.1 Prevention and Treatment
Civil society has
historically taken responsibility for the prevention and treatment of illicit
substance use in
The Ministry of
Health (together with the Ministry of Social Development) on the other hand,
has established a network of community drug treatment centres that are
integrated into the SUS, or national health care system, offering intensive,
intermediate, and non-intensive levels of care, and with a goal of treating
addiction and re-integrating addicted persons into society. The network
comprises of business sector, church and other relevant ministries.
The prevention
interventions employ psychosocial tools that focus on assisting families at
risk to develop coping mechanisms. Intervention covers three levels, primary
level, secondary level and addiction. Primary level focuses on group actions to
improve the health of a person abusing drugs. Secondary level provides various
rehabilitation strategies. The prevention is also done through universal
campaigns, selective prevention measures for small risk groups and for extreme
risk groups. The objective is to equip people with life skills to deal with
drugs.
Outreach programmes
for families and schools are also organised. Social workers, psychologists and
communities and/or “multipliers” also known as youth ambassadors are trained on
prevention strategies. They organise campaigns, workshops, sports and cultural
events, mobile prevention actions and distribute materials to areas where
people are experiencing drug problems. The municipality also has a working
relationship with the Ministry of Justice. Social workers and psychologists sit
in drug courts and attend to people arrested for drug related offences. Also,
through this partnership, diversion programmes are organised for people abusing
drugs
5.2.2 Centre for chemical dependency
The centre is an
outpatient day facility and funded by the Social Development department. It
provides rehabilitation, treatment and counselling programmes to people
dependent on substances and their families. It attends to more than 40 people
daily, more than 10 new comers and attends approximately 2000 patients a year.
Most patients are between 18 and 53 years. The centre is served by a number of
professionals – psychologists, nurses, specialists in rehabilitation, social
workers and medical practitioners. Despite the programmes rendered at the
centre, it has a high relapse rate of 45 per cent.
5.2.3 Law enforcement
Drugs remain
illegal in
·
Drug
traffickers get higher penalties.
·
The
financer of drug traffickers is treated as an offender or criminal.
·
The
person convicted of the crime of financing drug trafficking can get a penalty
of 8 to 20 years.
·
Drug
dealers, drug abusers and drug dependents are trialled in different courts.
Drugs users and drug dependents are judged in a special criminal’s court,
whereas, drug traffickers are judged in criminal courts.
The main aspects of
the law enforcement are to provide fiscal incentives so as to promote drug
prevention, treatment, social re-integration with the family and minimise use
of drugs. The law enforcement also aims to increase shared responsibility
between the government and civil society.
6. Other Social Service Programmes
6.1 Ministry of Social Development and
Fight against Hunger (MDS)
The MDS was created
at the beginning of 2004 to foster social development through the coordination and implementation of social
policies of the Federal Government. The MDS focuses on the Citizen’s income,
social assistance, food and nutrition security, and aspects of assessment and monitoring
of institutional management partnerships.
Programmes under
the MDS include:
·
Food Security
·
Social Assistance
6.1.1 Food Security
Under the Food
Security programme there are various sub-programmes such as the Zero Hunger,
Food Banks, Local Development Consortiums and Food and Nutrition Education
sub-programmes. The Zero-Hunger was started at the end of 2003 as a form of
reducing social vulnerability and strengthening family farming, through
fighting hunger and malnutrition. This programme is led by the Federal
Government and carried out through programmes implemented by the Ministry of
Social Development and Fight against Hunger (MDS).
The MDS collects
foodstuffs and distributes them to the needy as part of the Food Bank
sub-programme. Within this sub-programme, food is donated by food sector
enterprises (including industries, supermarkets and fairs). The Food Banks then
receive, select and distribute the food free of charge, to social service
organisations.
The Local
Development Consortiums are aimed at creating employment opportunities in the
agricultural industry, providing food and nutrition security and generating
income so as to boost local economic growth. This sub-programme entails
representatives of the Governments and civil society from the economically
challenged areas.
The goal of the
food and nutrition education sub-programme is to provide satisfactory nutrition
whilst placing value and respect to the different cultural and regional
preferences of the various ethnic groups. Integral to this sub-programme is the
development of knowledge and skills regarding selection and consumption of
healthy food.
6.1.2 Social Assistance
Within the Social
Assistance Programme there are a number of sub-programmes, including the
following:
·
Integral
Family Care Programme (PAIF)
This programme is
performed by the Social Assistance Reference Centre (CRAS). It is aimed at
following-up on families that are considered to be vulnerable so as to foster
their independence and improve their living conditions. The CRAS are public
state units that implement the social assistance policies, and are located in
areas of high rates of social risk and vulnerability. The MDS allocates funds
to the municipalities for the co-financing of the PAIF which is carried out in
the CRAS.
·
Child
Labour Eradication Programme (PETI)
The
PETI is aimed to eradicate all forms of child labour.
The municipalities
play a key role in fighting child labour, as they are responsible for investing
the funds from the Federal Government in social educational activities for
children and teenagers during non-school hours.
·
Continuous
Cash Benefit (BPC) Programme
This programme
ensures income security for the elderly (people over the age of 65 years) and
for people with disabilities who are unable to live independently or to be
employed. In both cases, they must have a per capita family income that is
lower than 25% of the minimum wage in
·
Programme
for the Youth
Programme for the
youth organises cultural and social activities, identify problems faced by the
youth in their communities and cities and provide leadership skills.
The Committee
visited a number of projects aimed at engaging young people focusing their
attention away from negative social behaviour. Concrete examples of worth done
with youth on the streets include Sport at Night provided by Hip Pop and a
boxing club, which also provide library services and a gym under the highway.
The other project trains young people in graffiti art.
·
Back
to Origins Programme
Back to origins
programme provides support to families who migrated to
·
Age
Protection Network
It arranges for
housing improvement, helps people to know their rights and hold meetings with
civil servants.
·
Child
Adoption
Child adoption
works with Welcome Family Programme to process adoption cases. Children are
given to foster families for a period of 12 months. These families work with
biological parents in order to return children if need be and if that fails the
children are given for adoption. The
Ministry has a special registry which records information collected from 10
regional co-ordinations. The registry has information on family structure,
income, type of housing of the family adopting a child.
6.2 Education
It was reported
that there are 1061 schools and 260 day care centres within the
In 1994 education
sector was decentralised into 10 regional co-ordinators and budget is allocated
according to these co-ordinators. Ninety-six (96) percent of the budget is
allocated to regional co-ordinators and four percent is allocated to the
central government. It was indicated that financial decentralisation allowed for
each school to be allocated budget according to its needs.
Schools are
represented by five School Community Councils which help in decisions-making
and administering the school. The Council meets twice a month with education
secretary to discuss issues affecting schools. The education system is
characterised by three cycles in which at the end of each cycle children are
assessed for the next cycle. The schooling system is organised in the manner
that caters for needs for the young adults who are working. Classes for young
adults are conducted during the day and at night depending on when they
work.
6.3 People with disabilities
People with
disabilities make 14.5% of the total population of
6.4 Secretary of the Municipal Secretariat
for the Handicapped & Reduced Mobility
The Secretary
co-ordinates projects aimed at promoting rights of people with disabilities in
education, labour and heath sectors. The projects are:
·
Structural projects: aims to improve accessibility on
architecture and engineering by producing descriptions and guidelines for
construction of buildings. A task team visit construction sites to evaluate and
train constructors.
·
Transformation in transport system: aims to make public transport,
particularly busses, accessible to people with disabilities. The project has
also improved accessibility of sidewalks.
·
Braille material: produces reading material in
braille and teaches sign language.
·
Ecological programme: expose people who are not blind to
experiences of blind people. For instance blindfolding people/employees or
taking them to dark places to give them a feel of being blind.
·
Culture and sports: organise cultural and sports
activities for people with disabilities.
There
are 500 institutions for people with disabilities in
6.5 Centre De Cidadania
The centre is state
(municipality) funded project and it offers various services – kindergarten,
fine arts, hotel school, handcraft school, early childhood development, sports
and recreation, dentistry and dance classes for the elderly. Rio de Jeneiro has
more than 200 centres rendering these services. Each centre has professionals
who attend to the needs of the communities and refer serious problems to relevant
departments.
6.6 Rehabilitation Centre for Alcohol and
Illicit Substances Addiction
The centre provides
psychosocial therapy to patients. It is administered by a team of health
professionals. The therapy includes family therapy, life orientation skills,
hygiene, sexuality and HIV and AIDS education and testing. There are 1098 of
these centres in
6.7 Municipal Specialised Service for HIV
and AIDS
The clinic offers
counselling and testing services. These are done by a team of health
professionals – nutritionist, nurses, doctors, dermatologists, gynaecologists,
social workers and orthodontist. They also counsel the patients to adhere to
the treatment. The
6.8 Health Surveillance Agency (Ministry of
Health)
The Agency was
established in 2007 to control the dispensing of licit drugs by pharmaceutical
companies. It uses SNGPC online database
in which pharmacies register and populate the drugs they have in store and
dispensing records. This enables a quick monitoring of any cases of abuse of
licit drugs. It also allows tracking of drugs between production, distribution
and dispensing.
6.9 Secretariat for Participation and
Partnership (SMPP)
The partnership was
established to reach out for vulnerable groups in
1. Youth co-ordination
2. Elderly co-ordination
3. Digital inclusion co-ordination
4. Women inclusion co-ordination
5. Sexual diversity
The digital
inclusion co-ordination runs telecentres in communities which offer digital
courses. Under the women inclusion co-ordination there are five departments
that deal with violence against women and about 30 000 women attend women
centres. The elderly co-ordination works in partnership with municipality and
initiate policies and strategies for elderly integration in the society and
autonomy.
7. Souza Cruz Institution
Souza Cruz
Institution is a non-government nationwide organisation, based in
A brief synoptic
background on the development of social transformation in
Elaborating on lack
of investment in education, the organisation indicated that
This programme is
implemented in partnership with CEDAJOR, a non-profit civil association, in
three southern states of
8. Briefing at the South African embassy
The embassy raised
concern of many South African youth, especially university students who are
arrested in
9. British American Tobacco (BAT)
BAT indicated that
it is important for the company to keep abreast, and understand controversies
around its product. This requires the company to manage the product and any
developments in the market. For instance, there is a current debate and
research undertaken on the use of Swedish snus as an alternative to cigarettes
as a form of harm reduction. The Swedish snus does not produce smoke, which
causes harm both to the smoker and a person who inhales it. However, the snus
contains the same ingredients as in the cigarettes, such as nicotine.
Therefore, it gives the same effect to the smoker as the cigarette. BAT
launched and piloted snus in
In addition to the
management of the product, the company ensures that retailers comply with
legislation of the country. For instance, it communicates with the retailers to
ensure that they comply with the policy of not selling tobacco products to
children younger than 18 years. It runs Youth Prevention Programmes and
communicates with hospitality industry to ensure that smoke free areas are
designated.
BAT uses 100
percent South African tobacco leaf, which some of it is produced in rural
areas. It indicated that the main
challenge of the industry is the problem of illicit trade of substances, which
ranges between 15 percent to 20 percent in the
As final remarks
the delegation undertook to assist BAT in recruiting people with disabilities
as it indicated that it faces challenges in this area. Furthermore, the
delegation undertook to continue the dialogue with BAT, especially given its
interest in promoting social development. In this light BAT invited the
delegation to visit its factory in
10. Lessons
The Portfolio Committee on Social Development can draw
important lessons from the Brazilian best practices on dealing with substance
abuse as well as other social development programmes:
·
Substance
abuse interventions: As discussed earlier Brazilian
programmes to fight substance abuse intervene both at family level and
individual level. This is a critical lesson that can be applied at early
intervention programmes as well as community based programmes as provided for
in the Prevention and Treatment for Substance Abuse Bill [B12B – 2008]
currently before Parliament.
·
Human
Resources: The Brazilian model of preventing and treating
substance abuse as well as HIV and AIDS involves intervention from various
health specialists necessary to attend to the needs of the patients at the
centres. This is an important holistic approach
·
Diversion
programmes: Similarly to Brazilian justice system, South African justice
system is moving towards diversion programmes or decriminalisation method. This
was advocated by the Department of Justice and Constitutional Development
during the public hearings on the Prevention and Treatment for Substance Abuse
Bill, held in Parliament. This is an area that attracted interest among in the
Committee and therefore may need to be explored further.
·
Intergovernmental
relations: The delegates visited a couple of centres run by
the local government and co-funded by the national department. This is a good
example for promoting intergovernmental governance in service delivery, in this
case prevention and treatment of substance abuse.
_____________________________________________________________________
References
Bacon, O., Pecoraro, M.L., Galvão, J. and Page-Shafer, K.
2004. HIV/AIDS in
De Rose, K. 2007. Cross-cultural contrast concerning alcohol
between
Galduróz, J.C.F., Noto, A.R.,
Kilpatrick, D. G., Saunders, B. E., and Smith, D. W. 2003. Youth
victimization: Prevalence and implications.
Palen L-A, Smith EA, Caldwell LL, Flisher AJ, Mpofu E. 2006.
Substance Use and Sexual Risk behavior Among South African High School
Students. Journal of Adolescent Health, 39: 761 – 763.
Plüddemann A, Flisher A, Parry CDH, McKetin R. 2007.
Methamphetamine use, sexual risk, aggression and mental health among
school-going adolescents in
Plüddemann A, Flisher AJ, Mathews C, Carney T, Lombard C.
(in press). Adolescent methamphetamine use and sexual risk behaviour in
secondary school students in
Townsend L, Flisher AJ, Chikobvu P,
Way,
Report to be considered.
4. Rreport
on the Department of Social Development’s Annual Report, Financial Statements
and Auditor-General’s report 2007/08, presented to the Portfolio Committee on
Social development on 21-22 January 2009, in Parliament.
DISCUSSION
The Department briefed the Committee on three areas of its
Annual Report 2007/08, namely, Institutional Capacity, Comprehensive Social
Security and Welfare Services. Issues raised included the need to interrogate
the reasons regarding problems faced by the Independent Appeals Tribunal and
challenges around the implementation of the means test for social grants and
Integrated Community Development.
Mr Zane Dangor,
Chief Operations Officer presented
an overview of the Annual Report and he among other things mentioned the
following:
Human Resource
Management
1)
He indicated that data for the years
2005 and 2006 was included in the presentation to show the Committee how the
Department has managed the issue of vacancies.
2)
The Department managed to reduce the
vacancy rate to 14%. The Department had implemented the new supply chain
management directives promulgated by the National Treasury.
3)
He outlined at length the key
achievements of the Department in its international obligations function. Focus
on this obligation increased considerably since 1994 with the objective to
forge long-term partnerships with developing countries
Final Audited Expenditure for the 2007/08 Financial Year
Mr Coceko Pakade,
Chief Financial Officer briefed the
Committee as follows:
1)
He contextualised the issues related
to expenditure in the current financial year. The Department made key
interventions in improving its performance and this resulted in an unqualified
Auditor General report. The bulk of the budget was transferred to households
and the Child Support Grant was extended.
2)
Since the National Department took
over from provinces, projections had improved significantly, and the Department
almost spent all its budgeted allocation.
3)
He outlined the specific reasons for
under spending but they were mainly related to the Department’s failure to fill
vacant posts due to capacity constraints.
4)
He said that the National
Development Agency (NDA) had been trying to get more money from the fiscus to
expand their services, but had been unsuccessful. The Department was engaging
with the NDA to sort out these matters.
5)
He said that the Department is
reviewing the legislation regarding the Disaster Relief Fund to consolidate
this fund. The Department is also reviewing the proposal to minimise the
Board’s involvement in this process, as in most instances it results in delays.
This would ensure quicker response in providing assistance to the victims of
disasters before the area is declared a disaster area.
6)
He also reported on the Auditor
General opinion, which noted that challenges related to transfer of functions
from the provinces to the national Department resulted in most of the balances
not disclosed because the Department was unable to do so until 2007/08. The
Department hopes to reconcile all the debtors by the end of 2008 as an
extension had been obtained from the Auditor General for disclosure in March
2009.
During the interaction with the
Committee the Department further provided the
following information:
Mr Pakade:
1)
The Department did not have
overspending. Where it appeared that there had been overspending, this merely
reflected consulting fees, which had been budgeted for but not used. The
savings do not necessarily mean that the key deliverables were not achieved.
2)
He indicated that there may have
been some projects that had not been fully executed and implemented. Thus,
money had been budgeted for but not paid to suppliers in the financial year
under review. Savings usually occurred when there was under spending, when a
strategy was changed or efficiency gains were used.
3)
A process of engagement with the
Planned Parenthood Association had been started and a project plan was being
developed. In terms of the regulations, certain protocols had to be met and as
a result the process took longer than anticipated. When the funding could not
be sourced, the Department applied to National Treasury for approval and asked
for a rollover. The application was granted and the Department was allowed to
pay this in following year.
4)
During audit process, Mr Pakade
informed the Auditor General that the Department was in the process of
developing a disaster recovery plan, and therefore it was not yet signed-off
and approved.
COMPREHENSIVE SOCIAL SECURITY
Mr Selwyn Jehoma,
Deputy Director-General: Social Security briefed the Committee as follows:
1)
The Government had adopted a Three
Pillar approach to social security. These are Social Assistance, Social
Insurance and voluntary contributions for benefits outside of Pillars 1 and 2.
He outlined the function of the social assistance and its impact on children,
youth and family benefits, Old Age and Disability, and other social assistance
policy Developments. He explained how
Social Security Transfers and Administration are implemented. He also reported
that the Department completed four feasibility studies regarding Social
Insurance.
2)
The Department is of the view that
Social Relief should be implemented by provinces. This would enable the
national Department to review progress on this matter and assess how people who
were not covered by the main social assistance grant were coping.
BRIEFING ON THE MEANS TEST
Mr Thabo
Rakoloti, Chief Director: Social Assistance briefed the Committee on the workings
of the Means Test as follows:
1)
The Means Test for Child Support
Grants has been increased from R1100 to R2300 per month. The Department has a
formula that automatically adjusts as the grant value increases. This formula
works similarly for the Care Dependency Grant, Old Age Grant, Disability Grant
and the War Veterans Grant.
2)
During 2008 the Department engaged
with National Treasury to universalise Old Age Grant and the approach taken was
to ensure that the Means Test threshold should be gradually increased to allow
for greater access to this grants.
During the interaction with the
Committee the Department further provided the following information:
Mr Jehoma
1)
The Department conducted a review on
the increment of grants and assess whether it was sufficient to wither erosion
as a results of inflation. He said the Department now has a formula that is
self-adjustable in line with incremental changes to the grant value.
Subsequently, the threshold is adjusted.
2)
The Department has not looked at
what the Old Age Grant could or could not buy as this is still determined by
the historical situation of the country. He raised the concern that at the
current value, the Old Age Grant is close to the minimum wage and might create
a disincentive to work.
3)
The issue of universalisation of
social security was a political issue and must be engaged with at a strategic
level.
4)
A dedicated programme was launched,
which is part of the Government programme of action to link social assistance
to economic activity. The Department provides social assistance to care givers
of children who are in a Work Fair programme and Welfare to Work programme. For
care givers, social security could link them to work but they could not be
expected to provide the work. The challenge with this approach pertains to
ensuring that institutional arrangements and institutions like that of Labour
and Social Assistance work in collaboration.
5)
Provinces are interpreting the
regulations regarding where to apply for social relief differently. A special
meeting with Heads of Department was held last year and the Procedure Manual
was made available. This will enable any SASSA employee or social worker to be
familiar with the regulations. Any office of SASSA provides social relief of
distress.
INDEPENDENT TRIBUNALS FOR SOCIAL ASSISTANCE
APPEALS
Mr Armstrong
Malope, Director, briefed the Committee as follows:
1) He provided a background to the Appeals process and noted
the inherent delays which have resulted in the backlogs which dated back as far
as 2004.
2)
He presented the Appeals Service
Delivery Model and the Establishment Progress processes. He explained the
composition of Tribunals, the current workflow process and the way forward for
the phasing in of the decentralising the system
3)
Large numbers of High Court cases in
KwaZulu-Natal (KZN) were due to disgruntled appellants who were frustrated with
the Department and planned to go to the High Court. The numbers of disgruntled
persons were around 3000 and all were scheduled for tribunal sittings.
4)
The question regarding the high
numbers of litigation in KZN was difficult to respond to. This was partly due
to the lack of communication regarding information from appellants. There are a
number of attorneys who specialise in these matters, and the Department commissioned
a study to investigate the matter. The preliminary findings, found that some
appellants were not even aware of these matters being referred to High Courts.
The investigation is still ongoing.
5)
Regarding alternative plans the
Director-General was committed to dealing with at least 35% of the cases before
the end of the financial year. Due to inadequate resources on the ground, there
were not in place. The Department plans to go full scale to enlist panel
members in all provinces
During the interaction
with the Committee the Department further provided the following information:
Mr Dangor mentioned that:
The Tribunal was funded
by the oversight budget. He noted that there was a sense that the Department
had under budgeted and fell short in estimating ‘the size of the beast’.
Treasury was approached but did not approve the budget.
1) Questions about process issues would
be explored the following day with SASSA, including medical assessments.
Mr Jehoma mentioned that:
1)
The Department had a
better planning system, but when the functions were shifted to SASSA, all
persons from Grant Administration were moved and only a small component was
left for policy work. It has therefore been extremely difficult to find
applicants with social security qualifications.
2)
The Inspectorate is not
an institution that the Department had envisaged, and Treasury has disowned
what they had previously proposed regarding such a structure. He also said that
the one benefit achieved was better compliance and that objective had not been
lost.
On the issue of
funding, Mr Pakade said that:
1)
Treasury had allocated funding for
the establishment of an Appeals Tribunal, but the question was whether the
money was sufficient. The National Treasury based their argument on two things:
firstly, the Department of Social Development is seeking funding for an
extensive structure that could be decentralised to provinces and regions; and
secondly, that the Department is dealing with a huge backlog.
2)
The Treasury felt that the
Department should put more money into addressing the huge backlog and not into
creating a new entity.
3)
Regarding litigation costs and the
huge risks involved in this area, the Department incurred costs due to
inefficiencies in administration. The funds had been initially earmarked for
SASSA, however SASSA did not receive them. For the Department the only risk is
when the backlog is not addressed. There are 52 000 cases that might go the
route of appeals with litigation. If appellants were given clear dates and
timeframes for adjudication then there would be a reduction in potential
litigation.
4)
The National Treasury was reluctant
to pay for this, and the Department would have to deal with the reality when
faced with it.
Programme Performance Welfare Services
Dr Maria Mabetoa,
Deputy Director-General: Welfare Services presented the following:
Welfare Services
Transformation
1)
The draft Social Services
Professions Bill has been developed.
2)
The Department has drafted the
policy on social services and partnerships with NGO’s in preparation for the
development of the legislation for social services.
Substance Abuse
1)
The Substance Abuse Bill was
approved by the Cabinet and introduced to Parliament.
2)
The costing of the Bill has been
finalised.
3)
Draft minimum Norms and Standards
for out-patient centres have been developed.
Services to
Children
1)
The Children’s Amendment Act 2007
was passed by Parliament in November 2007 and signed into law in March 2008.
2)
A draft of regulations on the Children’s
Amendment Act has been completed and made ready for publication and comment.
3)
A strategy to address backlogs on
foster care as well as alternative care strategy which includes residential
care and adoption services has been finalised.
4)
The department continuously provides
support to provincial departments in the registration of ECD sites.
5)
The Department conducted training to
provincial officials on the parenting programme and initiated implementation of
the programme in some ECD sites.
Services to
People with Disabilities
1)
A draft implementation strategy on
policy on Disability that will be taken for consultation during 2008/09 has
been finalised.
2)
Consultations with provinces on
draft rehabilitation guidelines for persons with disabilities have been
finalised.
3)
About 150 officials, both in
government and NGO’s, have been trained on disability policy and minimum
standards.
4)
An audit of support services to
children with disabilities has been initiated and a service provider to write a
report has been appointed.
Services to Older
Persons
1)
Draft regulations on the Older
Persons Act of 2006 have been developed.
2)
The regulations have been taken for
consultation with stakeholders in nine provinces.
3)
The Act will be ready for
implementation by April 2009.
4)
Norms and standards for both
Community-Based Care and Support Services have been aligned with the new
legislation.
5)
About 500 older persons and forum
members on the charter on the rights of older persons have been trained.
Families
1)
Training of 140 service providers on
the implementation of the family strategy in all provinces was conducted.
2)
The Department has established
one-stop crisis centre for victims of crime and violence in Mitchell’s Plain in
partnership with the UNODC.
3)
Funds were allocated to 26 NGO’s from
the Criminal Assets Recovery Funds to support delivery of victim support
services.
Social Crime
Prevention
1)
Secure Care Detention Management
System has been rolled-out to seven provinces and 174 officials have been
trained as end-users in 22 facilities.
2)
A customer care excellence training
of 164 probation services officials has been conducted.
3)
About 25 provincial coordinators on
minimum norms on diversion have been trained.
Integrated Community Development
Dr Connie Kganyago presented as follows:
Integrated Community Development had been divided into four
programmes; namely, HIV/AIDS, Community Development, Youth Development and
Non-Profit Organisations.
Programme
3: Social Welfare Services (HIV and AIDS)
1)
The Department of Social Development
strengthened its support of Home/Community-Based Care and support initiatives,
by funding of 1 579 Home/Community-Based Care organisations and 617 drop-in
centres through provincial offices.
2) The Department also ensured that 60% of all funded
Home/Community-Based Care organisations complied with the norms and standards
set by the Department.
3) The Department provided services and support to 50 887
Child Headed Households within the Home/Community-Based Care and that it was
estimated that South Africa has 1,5 million maternal orphans.
Programme 4: Community Development, Non-Governmental
Organisations and Youth Development
1)
The Department developed a
Partnership with Trade and Industrial Policy Strategies (TIPS) under the
supervision of the Second Economy Strategy in the Presidency that facilitated
the ‘Communities Work Programme’ in the form of a work guarantee scheme.
2)
It also conducted a Skills Audit of
Community Development Practitioners (CDPs) in all nine provinces.
3)
The skills audit focussed on the
geographical location of the CDPs and their capacity to deliver sustainable
community development programmes.
Non-Governmental Organisations
The Department completed and gazetted the Regulations of
the terms and conditions to appoint a technical committee that complied with
Sections 10 and 20 of the Non-Profit Organisations Act that would strengthen
and improve the regulatory framework of non-governmental organisations.
Youth Development
The Department engaged stakeholders on the National Youth
Service in all nine provinces as well as processing sights for the
implementation of the National Youth Service Programme.
CONCERNS AND RECOMMENDATIONS OF THE
COMMITTEE
1)
The Committee felt that the Means
Test was not a user friendly system for customary marriages. It was clarified
that a legal union necessitated a duty of support even for multiple spouses.
2)
The Committee expressed
disappointment that provinces were not implementing social relief of
distress programme in a uniform manner, but were assured that the regulations
to inform applications would be provided by the Department.
3)
The Department’s failure to
establish an Inspectorate as provided under the Social Assistance Act 2004 was
a major setback for the Department.
4)
The high numbers of appellants in
5)
The Committee noted the high number
of children placed under foster care in
6)
The Committee noted that there were
complaints from people that many old age homes were in poor condition.
7.
The Committee expresses concern over
the use of Social relief for registration for tertiary studies. The Committee
has already addressed a letter to the Minister of Education requesting it to
furnish the Committee with mechanisms it has put in place to provide financial
assistance to assist students pay for registration fees.
RECOMMENDATIONS
1)
The Committee requests that a list
be made showing the Mini Drug Master Plan reports that provinces submitted.
2)
Substance Abuse should be moved to
the Social Crime Prevention section.
CONSIDERATION OF
THE FINANCIAL STATEMENTS AND THE AUDITOR-GENERAL’S REPORT
The Committee considered the above mentioned reports and is
satisfied with the improvement achieved with management of funds of the
Department and Agencies as reflected on the Auditor General’s report and
decided therefore not to hold separate hearings in that regard.
Report to be considered.