Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698930301645.pdf (South Africa)
Wednesday, 9 May 2018] 1 No 57—2018] FIFTH SESSION, FIFTH PARLIAMENT PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS WEDNESDAY, 9 MAY 2018 TABLE OF CONTENTS ANNOUNCEMENTS National Assembly 1.

Membership of Committees ................................................................. 2 2.

Referral to Committees of papers tabled .............................................. 2 TABLINGS National Assembly and National Council of Provinces 1.
Minister of Justice and Correctional Services ...................................... 3 National Assembly 1.

Speaker ................................................................................................. 4 COMMITTEE REPORTS National Assembly 1.

Health.................................................................................................... 4 2.

Public Works ........................................................................................ 7 3.
Communications ................................................................................. 69 4.

Women in The Presidency ................................................................ 109 5.

Cooperative Governance and Traditional Affairs ............................ 144 ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 2 [Wednesday, 9 May 2018 6.

Agriculture, Forestry and Fisheries .................................................. 169 7.
Tourism ............................................................................................. 181 8.

Energy ............................................................................................... 210 9.

Labour ............................................................................................... 234 ANNOUNCEMENTS National Assembly The Speaker 1.
Membership of Committees (1) The following changes to Committee membership have been made by the Democratic Alliance: Portfolio Committee on Justice and Correctional Services Appointed: Ngwenya, Ms GSA [Alternate] 2.
Referral to Committees of papers tabled (1) The following paper is referred to the Joint Standing Committee on Defence for consideration and report: (a) Annual Report of the National Conventional Arms Control Committee (NCACC) for the year ended December 2017, tabled in terms of section 23(1)(c) of the National Conventional Arms Control Act, 2002 (Act No 41 of 2002).
(2) The following papers are referred to the Portfolio Committee on Justice and Correctional Services: (a) Proclamation No R. 9, published in Government Gazette No 41561, dated 06 April 2018: Referral of matters to existing Special Investigating Unit and Special Tribunal: Mbhashe Local Municipality, in terms of the Special Investigating Units and Special Tribunals Act, 1996 (Act No 74 of 1996).
(b) Proclamation No R. 10, published in Government Gazette No 41561, dated 06 April 2018: Referral of matters to existing Special Investigating Unit and Special Tribunal: Department of Correctional Services, in terms of the Special Investigating Units and Special Tribunals Act, 1996 (Act No 74 of 1996).
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 3 (c) Proclamation No R. 11, published in Government Gazette No 41561, dated 06 April 2018: Referral of matters to existing Special Investigating Unit and Special Tribunal: Eskom Holdings SOC Limited and Transnet SOC Limited, in terms of the Special Investigating Units and Special Tribunals Act, 1996 (Act No 74 of 1996).
(3) The following paper is referred to the Portfolio Committee on Telecommunications and Postal Services for consideration and report.

Report of the Independent Auditors on the Financial Statements and Performance Information is referred to the Standing Committee on Public Accounts for consideration: (a) Report and Financial Statements of .ZA Domain Name Authority (ZADNA) for 2016-17, including the Report of the Independent Auditors on the Financial Statements and Performance Information for 2016-17.
(4) The following paper is referred to the Portfolio Committee on Police for consideration and report.

Financial statements are referred to the Standing Committee on Public Accounts for consideration: (a) Report and Financial Statements of the National Forensic Oversight and Ethics Board for 2016-17 (including a Progress Report for to 30 September 2017), tabled in terms of section 15AC (5) of the Criminal Law (Forensic Procedures) Amendment Act, 2013 (Act No 37 of 2013).
the period 01 April 2017 TABLINGS National Assembly and National Council of Provinces 1.

The Minister of Justice and Correctional Services (a) Government Notice No 459, published in Government Gazette No 41593, dated 26 April 2018: Administration of Estates: Amendment Regulations, made under section 103 of the Administration of Estates Act, 1965 (Act No 66 of 1965).

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 4 [Wednesday, 9 May 2018 National Assembly 1.
The Speaker (a) Reply from the Minister of Health to a resolution of the National Assembly calling on the Department of Health to investigate reasons for a large outbreak of human rabies cases despite vaccinations, as adopted by the House on 8 March 2018.

Referred to the Portfolio Committee on Health.

COMMITTEE REPORTS National Assembly 1.

Report of the Portfolio Committee on Health on the Choice on Termination of Pregnancy Amendment Bill [B34 – 2017], dated 9 May 2018.
The Portfolio Committee on Health (the Committee), having considered the Choice on Termination of Pregnancy Amendment Bill [B34 – 2017] (National Assembly – section 76), referred to it and classified by the Joint Tagging Mechanism (JTM) as a section 76 Bill, reports as follows: 1.

The Choice on Termination of Pregnancy Amendment Bill [B34 – 2017], a private member’s bill, was referred to the Portfolio Committee on Health on 6 December 2017.

2.
2.

The Committee met with the sponsor of the Bill, Mrs C Dudley, MP, on 27 March 2018 to receive a briefing on the Bill.

3.

The Committee received input on the Bill from the Department of Health (the Department) on 2 May 2018.

4.
The Committee observed and noted the following in relation to the proposed amendments contained in the Bill, as presented by the Department: 4.1 Provision of ultrasound scans before a termination of pregnancy to determine the gestation period: • The current South African Guidelines on Termination of Pregnancy do not prescribe the use of ultrasound scans/machines for routine pre-termination investigation as a mandatory requirement; • The World Health Organisation (WHO) Guidelines state that the use of routine pre-abortion ultrasounds is not necessary is considered as a potential barrier to service delivery; (Safe Abortion Guidance, 2012).
This ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 5 • Nurses are trained to examine uterine size manually, and the use of the pregnancy wheel is also advocated; and termination of pregnancy present • The showing of ultrasound images to pregnant women who two present for a limitations: it can bias the content of counselling (which should be non-directive); and it can put pressure on the woman to change her decision, by facilitating feelings of guilt.
4.2 Mandatory counselling versus voluntary counselling: • Provision of information is important for all services rendered, however, the decision to have a termination or not should be free from pressure; • A woman is best positioned to make the decision to terminate her pregnancy including taking her own socio- economic circumstances into context; • Many women who present for a termination of pregnancy have already made the decision to terminate; • According to the WHO, provision of counselling to women who desire counselling should be voluntary, confidential, non-directive and conducted by a trained person; and • The current Choice on Termination of Pregnancy Act, 1996 (Act No.92 of 1996) provides for voluntary counselling and is aligned to WHO recommendations.
4.3 Inclusion of social workers in decision-making in certain circumstances: • The WHO states that “requiring third-party authorisation is a health system and service delivery barrier that affects women’s access to safe abortion” (WHO, 2012); and Involvement of a social worker can be a barrier to care, including that are not medically necessary.

increasing delays • 5.


Financial Implications The Committee noted that in order to implement the proposals contained in the Bill, additional funding will be required for the following: • Human Resources: additional social workers, professional nurses (general nursing and speciality nursing), counsellors, and technicians would need to be employed and trained); and • Equipment: additional ultrasound machines will need to be bought and maintained.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 6 [Wednesday, 9 May 2018 6.

Costing Assumptions The Committee further noted that in order to implement the Bill, all public hospitals that offer termination of pregnancy services will need to have ultrasound machines to determine the gestation period of the foetus.
Furthermore, these hospitals that offer terminations of pregnancy from the 13th up to and including the 20th week of gestation will also need to provide a social worker to consult with the pregnant woman to determine whether the continued pregnancy would affect the social or economic circumstances of the woman.

Furthermore, mandatory counselling services would need to be made available.
Hence, in this scenario: • All calculations assume that termination of pregnancy services will be scaled up to 75% of existing primary health care (PHC) facilities and all hospitals excluding specialised hospitals; • 75% of PHC facilities (3736) and 332 hospitals must be equipped to offer termination of pregnancy services; • 75% of the PHC facilities and 100% hospitals will require a Professional Nurse (General Nursing) and Professional Nurse (Speciality Nursing) respectively to be able to meet demand for termination of pregnancy services; • 75% of PHC facilities and 100% hospitals will require a trained counsellor, social worker and ultrasound technician.
With further data on current availability and distribution of these cadres, this assumption can be made more accurate; and • 50% of all PHC facilities will require an ultrasound machine to meet the increased demand for this service.

The Committee noted that the costs of providing the services as proposed in the Bill will be prohibitive as indicated by the Department.
Following extensive Committee deliberations, the Department and guidance from the World Health Organisation on the Bill, the Committee concludes as follows: input from • There is lack of conclusive evidence the proposed amendments contained in the Bill will enhance the provision of care; that • The costs of providing the services as proposed by the Bill are prohibitive; and • The proposed amendments in the Bill will present further barriers in accessing termination of pregnancy services.
Based on the aforementioned reasons, the Committee believes that the Bill is not desirable at this stage.

The Committee is also of the opinion that greater education and awareness campaigns as well as prevention programmes are needed to ensure that women are equipped with the ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 7 necessary information in order to make informed decisions concerning their reproductive health and rights.
The Committee thanks Mrs C Dudley for sponsoring this Bill and in so doing giving the Committee the opportunity to engage in a continuous debate on improving the health system of our country.

Report to be considered.

2.

Report of the Portfolio Committee on Public Works on Budget Vote 11: Public Works and Annual Performance Plans 2018-2019 of the Department of Public Works, the Property Management Trading Entity, and entities reporting to the Minister of Public Works, dated 8 May 2018.
The Portfolio Committee on Public Works, having considered the Annual Performance Plans and Budget of the Department of Public Works, the Property Management Trading Entity, and the entities reporting to the Minister of Public Works, wishes to report as follows: Introduction The Portfolio Committee on Public Works has oversight responsibility over the Ministry of the Department of Public Works as policy leader, and the entities that report to the Minister, namely the Independent Development Trust (IDT), the Construction Industry Development Board (CIDB), Agrément South Africa (ASA), and the Council for the Built Environment (CBE).
At meetings held on 17 and 24 April 2018, the Portfolio Committee met with the Minister, Deputy Minister and the senior management teams and boards of entities on the Annual Performance Plans (APPs) and budgets for the 2018/19 financial year.
More specifically, the Committee interrogated the financial and other resource allocations to programmes that had to be used to implement policy priorities that are stated in the National Development Plan (NDP), the Medium Term Strategic Framework (MTSF), and the 2018 State of the Nation Address (SONA).

The mandate of the Department of Public Works is derived from the Constitution of the Republic of South Africa, 1996, and the Government Immovable Asset Management Act (No.
19 of 2007) that describes the Department as the custodian and portfolio manager of government’s immovable assets.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 8 [Wednesday, 9 May 2018 The Property Management Trading Entity became operational in the 2015/16 financial year1.

This brought about a shift in the focus of the Department’s role.
The Department of Public Works now focuses on policy formulation, coordination, regulation and oversight relating to the provision of accommodation and expert built environment services to client departments at national level.

The PMTE remains a government component of the DPW and shares services such as finance and supply chain management, and governance risk and compliance functions.
The Department is further mandated to coordinate and provide strategic leadership in job creation initiatives through the implementation of government’s Expanded Public Works Programme (EPWP) that is initialised and managed at different departments across the three spheres of government.

Since the 2015/16 financial year, the PMTE is responsible for the planning, acquiring, managing and disposing of immovable assets in the department’s custody.
It also has the function of ensuring the full implementation of the Government Immovable Asset Management Act by recording and maintaining the Immovable Asset Register.

This is an important precursor to utilising the value locked within government’s immovable assets so that the PMTE generates funding through its operationalisation.

The PMTE faces challenges in this regard which will be further dealt with in the relevant sections of this report.
Policy Priorities for the Department of Public Works, PMTE and Entities As stated earlier, the Department continues to focus on the policy priority to create employment opportunities for vulnerable sectors of the South African society that struggle to enter the formal employment market.
The Department plays a coordinating and capacity development role through its Expanded Public Work Programme (EPWP), where labour intensive infrastructure development and maintenance projects takes place at the national, provincial and municipal spheres of government.
Apart from the above, over the medium term expenditure framework period, the policy focus for government departments and municipalities with whom the Department of Public Works play a coordinating, implementing role with its entities, remains on: 1 The operationalisation of the PMTE is a key deliverable of the five-year term 2014-2019.

It is a strategy to ensure increased functionality of the Department of Public Works.
The specific section dealing with the PMTE explains in further detail that its operationalisation was as a government component and not a legislated entity scheduled under the Public Finance Management Act (No.

1 of 1999).

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 9 • Creating 6 million work opportunities by 2019 through the EPWP.
• Creating work opportunities for vulnerable groups (such as women and people with disabilities) with particular emphasis placed on addressing youth unemployment.

• Erecting new schools through the Accelerated School Infrastructure Delivery Initiative (ASIDI) to improve educational infrastructure.

• Addressing collusion by cartels that hamper the growth of small businesses (Operation Phakisa).

• Investing R100 million on capital and maintenance programmes of small harbours.
• Utilising the R900 billion budget towards economic transformation.

• Implementing regulations that make it compulsory for large contractors to sub- contract 30% of business to black-owned enterprises.

• Addressing corruption and other related offences by public servants.

• Ensuring that the Expropriation Bill is constitutionality sound.

The National Development Plan (NDP) followed from the Diagnostic Report released by the National Planning Commission in June 2011.
The Diagnostic Report highlighted both the achievements and the challenges of government since 1994.

It identified slow progress in nine areas, due in part, to the failure to implement the policies of which the following apply specifically to Public Works2: • The numbers of employed people remain low.

• The country is still challenged by poorly located, inadequate and under- maintained infrastructure.

• Inclusive development is impeded by the spatial divisions within the country.
• People receive uneven and often poor quality public services.

• Levels of corruption remain high.

2 National Planning Commission (2012), p. 15.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 10 [Wednesday, 9 May 2018 The NDP emphasised the “provisions of income support to the unemployed through various active labour market initiatives such as public works programmes, training and skills development, and other labour market related incentives.”3 The focus referred to earlier through the DPW’s function of coordinating work opportunities created through EPWP projects, attempts to deal with this challenge.
In the 2015 State of the Nation address the President announced a Nine Point Plan, which is expected to address the need to grow the economy and stimulate job creation.

The President, in the 2017 SONA again listed the policy priorities that respond to some of the challenges affecting the country.

These include: • • “Electricity challenges.

Inadequate economic infrastructure in general.

• Unwieldy regulatory processes that delay investment.
• Insufficient Government coordination, which contributes to investor uncertainty.” In the 2018 State of the Nation Address the President emphasised the contribution DPW through the Expanded Public Works Programme, referring to the creation of “more than 3.2-million work opportunities.
In the context of widespread unemployment, they continue to provide much-needed income, work experience and training.”4 The President further stated: “At the centre of our national agenda in 2018 is the creation of jobs, especially for the youth.”5 A number of measures would be taken to address the challenges identified over the last few years.
Amongst these are a jobs summit that would be arranged “to align the efforts of every sector and every stakeholder behind the imperative of job creation.”6 In the 2018/19 APP the Department continues to be responsive to the following United Nations Sustainable Development Goals (SDGs):7 Goal 1: End poverty in all its forms everywhere.

Goal 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.

3 National Planning Commission (2012), p. 360.


4 State of the Nation Address, Ramaphosa, C. (2018).

5 Ibid.

6 Ibid.

7 UNDP (2015).

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 11 Goal 9: Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation.

Goal 13: Take urgent action to combat climate change and its impacts.
Analysis of the Strategic Plans, Annual Performance Plans and Budget allocations This section of the report deals with the analysis of respectively, the Department of Public Works (DPW), and the Property Management Trading Entity (PMTE).
This is followed by an analysis of each of the entities reporting to the Minister of Public Works, namely, Agrément South Africa (ASA), the Independent Development Trust (IDT), the Construction Industry Development Board (CIDB), and the Council for the Built Environment (CBE).

1.

The Department of Public Works (DPW) The Department’s mandate includes the following functional responsibilities in terms of the Government Immovable Asset Management Act (No.
19 of 2007) following the operationalisation of Property Management Trading Entity (PMTE) as an internally operating entity that performs the following operations that used to be done by the DPW:8 • Undertake the custodial and portfolio management of national Government’s immovable assets.9 • Formulate policy, coordinate, regulate and undertake oversight in the provision of accommodation and expert built environment services to Client Departments at national government level.
• Plan, acquire, manage and dispose of immovable assets under its custodianship.

As mentioned above, the Department of Public Works is also responsible for four entities.

These are: • Agrément South Africa (ASA).

• Construction Industry Development Board (CIDB).

10 8 The PMTE was operationalised in the 2015/16 financial year.

9 Department of Public Works (2014), p. 43.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 12 [Wednesday, 9 May 2018 • Council for the Built Environment (CBE).
• Independent Development Trust (IDT).

1.1.

Programme changes in the APP Changes to the programme structure of the Department’s programmes was noted in the previous financial year.

These changes emphasised the two main priority programmes - Immovable Asset Investment and the EPWP.
At the same time, the introduction of Programme 4, Property and Construction Industry Policy and Research, stressed the need to review the Public Works White Papers to develop legislation that would strengthen the mandate of the Department and its entities as property manager and landlord of the state.
During the 2014/15 financial year the Department reviewed, and restructured its programmes so that a large portion of the allocation of Programme 2, Immovable Asset Management, was moved to the Property Management Trading Entity (PMTE) sub-programme residing under Programme 4.

At the same time, the PMTE was operationalised in March 2015 and the bulk of the property and infrastructure functions (under Programme 2, Immovable Asset Management), as well as the staff was shifted to the newly created entity.
In the five-year strategic plan 2014 - 2019, the Minister referred to the long- standing challenges in the Department.

In Annual Performance Plans over this period, the Minister continued to identify these as being of a structural and systemic nature.

The Department consistently reported on obstacles that hampered its own operations and that of its entities in achieving its core mandate.
The problematic areas include leasing, key asset management, providing accommodation to client departments, maintenance and upgrading of assets.

These areas are crucial to ensure that all client departments and specifically those in the sectors of health, basic education, justice, and security provision can provide vital services to the nation at provincial and municipal spheres of government.
A weakly operational Department of Public Works and Property Management Trading Entity have the unfortunate effect of weakening service e delivery in all sectors across the three spheres of government.

An operationally improved, financially fit and vibrant 10 Department of Public Works (2014), p. 43.

The Department regulates the construction industry and built environment through the Construction Industry Development Board Act (No.

38 of 2000), the Council for the Built Environment Act (No.
43 of 2000) and the six Professional Council Acts that regulate the six Built Environment Professions.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 13 Department of Public Works and Property Management Trading Entity will have the desired knock-on effect of improved service delivery that form the backbone of a socially and economically strong country.
The following section provides a comparative analysis of the budget allocations to programmes with which the DPW can operate as a well-managed state property owner and accommodations manager that facilitates a well-functioning government.

1.2.
Budget Allocations to programmes for the Department of Public Works Budget Programme Nominal Real Nominal Real Rand Rand % % change change change change R million 2017/18 2018/19 2019/20 2020/21 2017/18-2018/19 2017/18-2018/19 Administration 443,3 480,3 511,6 557,7 37,0 12,0 8,35% 2,70% Intergovernmental Coordination 48,2 58,1 62,0 64,8 9,9 6,9 20,54% 14,26% Expanded Public Works Programme 2 407,6 2 566,6 2 746,3 2 903,9 159,0 25,2 6,60% 1,05% Property and Construction Industry Policy and Research 4 001,4 4 250,4 4 462,8 4 703,0 249,0 27,4 6,22% 0,69% Prestige Policy 84,6 97,9 116,3 117,0 13,3 8,2 15,72% 9,69% TOTAL 6 985,1 7 453,3 7 899,0 8 346,4 468,2 79,6 6,70% 1,14% Source: National Treasury (2018) The Department of Public Works received a budget allocation of R7,45 billion for 2018/19 with which to accomplish the priorities listed above.
This represents an ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 14 [Wednesday, 9 May 2018 increase of 6,7% in nominal terms, and 1.1% in real terms (calculating the impact of inflation) from the 2017/18 adjusted appropriation of R6,99 billion.

The Department’s budget represents approximately 0,1% of the national appropriation by vote, excluding direct charges.
In terms of economic classification, the departmental budget includes transfers totalling 86,9% of the budget, with a total monetary value of R6,48 billion, from the R6,09 billion allocation in 2017/18.

This constitutes an increase of R389,8 million (or 6,4% in nominal terms and 0,9% in real terms).

Of these, R1,52 billion is transferred to Provinces and Municipalities as Conditional Grants.

A total of R4,17 billion is allocated to Departmental Agencies and Accounts.
During 2018/19, Current Payments amount to 12,8% of the budget (R951,5 million) and Capital Payments amount to 0,3% of the budget (R23,5 million).

Compensation of employees increased by R59,9 million (from R458,4 million in the 2017/18 adjusted period) to R518,3 million in 2018/19.

Vote Goods and Services Noteworthy increases from the previous financial year under the vote Goods and Services are the following: • Administrative Fees increased by R26 000.

• Advertising increased by R3,6 million.


• Minor Assets increased by R864 000.

• Audit Cost: External increased by R1,0 million.

• Communication increased by R1,8 million.

• Computer Services increased by R2,6 million.

• Infrastructure and Planning Services increased by R14,0 million.

• Contractors increased by R5,3 million.

• Travel and Subsistence increased by R2,4 million.
Reductions included the following: ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 15 • Consultants: Business and Advisory Services decreased by R6,7 million.

• Legal Services decreased by R2,7 million.

• Catering: Departmental Activities decreased by 1,2 million.

• Agency Support Services decreased by R988 000.

• Consumable: Stationery, Printing and Office Supplies decreased by R122 000.

• Operating leases decreased by R117 000.


Departmental Receipts The Department generates revenue through its Property Management Trading Entity (PMTE), by letting properties and official quarters, and through the sale of land and buildings.

It is projected that the Department will collect revenue to the total value R1,9 million for 2018/19.

This is a decline of R140 000 from the R1,8 million in 2017/18.
The Department sub-categorises the sale of goods and services produced, for example, figures are presented for monies generated from the Sale by market establishment: • R120 000 Market establishment (covered and open rental parking).

• R160 000 Other Sales: Tender documents.

• R40 000 Sales: Waste.

• R600 000 Interest, dividends and rent on land.


• R1.0 million Transactions in financial assets and liabilities.11 1.2.1 Programme 1: Administration Programme 1 provides strategic leadership, management and support services to the Department.

For 2018/19, the Administration programme receives an allocation of R480,3 million.

This represents 6,4% of the overall departmental budget.

This allocation increases at a nominal rate of 8,3%, and 2,7% in real terms from the previous allocation.
11 National Treasury (2018), p. 218.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 16 [Wednesday, 9 May 2018 In terms of economic classification, the Administration programme budget includes current payments to the value of R462,9 million.

Of this, an amount of R263,5 million must be spent on compensation of employees.

The budget for the compensation of employees increases by R31,5 million or 13,6% in nominal terms and 7,7% in real terms in 2018/19.
The Department allocates R199,4 million to goods and services.

This constitutes an increase of R5,8 million (or 3,0% in nominal terms and a decline of 2,4% in real terms).

Most of the economic classifications under Goods and Services increased for 2018/19.

Increases are recorded under the following:12 • Computer Services increased by R2,6 million (or 2,2% in real terms).

• Consultants: Business and Advisory Services increased by R2,7 million (or 15,6% in real terms).
• Operating Leases increased by R1,6 million (or 1,3% in real terms).

• Travel and Subsistence increased by R4,7 million (or 19,7% in real terms).

Decreases are recorded as follows: • Legal Services decreased by R2,7 million (or 16,1% in real terms).

• Property Payments – decreased by R100 000 (or 5,6% in real terms).

• Interest and Rent on Land decreased by R1,8 million (or 100% in real terms), as no allocation was recorded for 2018/19.
A total of R11,6 million is allocated towards Capital Expenditure.

This constitutes an increase of R2,2 million (or 23,4% in nominal terms and 17% in real terms), from the R9,4 million of the previous year.

The above-allocation is for Machinery and Equipment.

Software and Other Intangible Assets decreased by 100% as it did not receive an allocation for 2018/19 or 2017/18.
The Annual Performance Plan for 2018/19 states that Programme 1’s aim is to:13 • Improve governance processes within the Department and the PMTE through 100% compliance of management practices as per the Management Performance Assessment Tool (MPAT).

12 National Treasury (2018), p. 219.

13 Department of Public Works (2018), pp.

75-81.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 17 • Combat fraud and corruption in the Department and the PMTE by reducing fraud and corruption risk levels by 80%.

• Receive an unqualified audit outcome for 2017/18.

• Submit an HR Implementation Plan to the Department of Public Service and Administration (DPSA) by March 2019.
• Integrate the Construction Project Management; Condition Assessment; Scheduled Maintenance; Lease-in and Lease-out Modules into the Enterprise Resource Planning (ERP) system.

• Manage 100% of all litigation cases within the period stipulated by court procedures.

• Undertake 36 initiatives to accelerate the transformation agenda of the Department.

• Achieve a 4,0 management practice index score.

• Initiate 100% investigations of validated allegations within 30 days.
• Recommend two interventions to mitigate fraud risks within the Department of Public Works and the PMTE.

• Reduce irregular expenditure baseline by 100%.

• Settle all invoices within 30 days.

• Award 70% of Bids within 56 working days of closure of the tender advertisement.

• Award 88% of quotations within 30 working days from requisition date.

• Award 75% of procurement spend of bids to designated groups in line with the Preferential Procurement Regulations 2017.
• Fill 100% funded prioritised vacancies within 6 months from the date of advertisement.

• Implement five Property Management Modules (Condition Assessment; Scheduled Maintenance; Lease-in, Lease-out and Construction Project Management).

• Enhance four Modules, the Immovable Asset Register, Facilities Management Call Centre, Movable Assets, Lease-in (Phase II) as per the Enterprise Resource Planning (ERP) implementation plan.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 18 [Wednesday, 9 May 2018 • Develop a feasibility study on the ERP system for the Public Works Sector.

• Subject 100% of cases reported on fraud and corruption or misconduct to disciplinary processes.

• Prevent 100% default judgements against the Department.

A total of R114 million has been set aside over the medium term to implement the Anti-fraud and Corruption Strategy.
The emphasis will be on preventative measures with clear lines of accountability, to enhance efficiency and thereby reducing opportunities for corruption as well as fruitless and wasteful expenditure.14 The Department plans to consolidate, develop and manage the built environment skills development pipeline with State and non-State stakeholders.

A Professional Service Branch will be established within the Department to increase its institutional capacity.
The Department’s target is to have 3 235 beneficiaries participate in the skills development programme over the medium term.15 1.2.2 Programme 2: Intergovernmental Coordination Programme 2 seeks to promote sound intergovernmental relations and strategic partnerships.

Coordinate with provinces on: Immovable Asset Registers; construction and property management; the implementation of the Government Immovable Asset Management Act (No.
19 of 2007); and the reporting on performance information within the Public Works Sector.

Programme 2 was one of the main programmes of the Department prior to some of its sub-programmes and functions being shifted to Programme 4 (see below).

It proportionally represents 0.8% of the overall departmental budget allocation for 2018/19.

Its 2018/19 allocation of R58,1 million constitutes an increase of R9,9 million.
This represents a nominal increase of 20,5% (and 14,3% in real terms) from the R48,2 million allocated in the 2017/18 financial year.

14 National Treasury (2017), p. 205.

15 National Treasury (2017), p. 204.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 19 Expenditure for Programme 2 for the 2018/19 financial year currently consists of the following three sub-programmes: • Monitoring, Evaluation and Reporting receives an allocation of R6,3 million.16 This is a decrease of R7,7 million from the R14 million received in 2017/18, which constitutes a nominal decrease of 55,0% (and 57,1% in real terms) from the previous year.
• Intergovernmental Relations and Coordination receives an allocation of R26,1 million.

This is an increase of the R16,1 million from the R10 million received in 2017/18, which constitutes a nominal increase of 161,0% (or 147,4% in real terms) from the previous year.

• Professional Services17 receives an allocation of R25,7 million.
This is an increase of the R1,5 million from the R24,2 million received in 2017/18, which constitutes a nominal increase of 6,2% (and 0,7% in real terms) from the previous year.

In terms of economic classification, R52,2 million is allocated to current payments.

This constitutes an increase of R9,8 million or 23,1% in nominal terms (16,7% in real terms) from the previous year.18 Of this amount: • Compensation of employees consists of R36,1 million (an increase of R6,8 million).
• Goods and Services R16,2 million (an increase from R3,1 million in 2017/18) of which the following increase by R100 000: o R700 000 towards Communication.

o R500 000 towards Operating leases.

The other increases include: o R6,7 million (an increase of R3,2 million) towards Departmental agency and support/ outsourced services, (which also funds the Turnaround Strategy of the Department).

16 National Treasury (2018), p. 220.

17 National Treasury (2018), p. 213.


It should be noted that the Professional Services sub- programme is a new addition under Programme 2.

The sub-programme receives an allocation of R81.7 million over the medium term, of which R37.1 million is for Compensation of Employees; R28 million for Goods and Services and R15.9 million towards Transfers to Households for Non-Employees Bursaries.

18 National Treasury (2018), p. 220.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 20 [Wednesday, 9 May 2018 o R3,4 million (an increase of R200 000) for Travel and subsistence.

o R1,1 million (an increase of R200 000) towards Operating payments.

However, the Training and Development allocation remains unchanged for 2018/19, at R1 million, similar to the adjusted allocation in 2017/18.

Programme 2’s aim for 2018/19 is to:19 • Develop four Policy Frameworks for the Public Works Sector.
• Sign 55 joint service delivery agreements with public bodies across all spheres of Government.

• Review five intergovernmental governance structures.

• Identify 27 State-owned properties for student accommodation.

• Ensure the participation of 1 220 beneficiaries in the Department and the PMTE Skills Development Programme over the medium term; aimed at restoring the skills pipeline in the built environment.
• Approve five asset management service tools within the different phases of the Government Immovable Asset Management Act (No.

19 of 2007); aimed at establishing institutional capacity to manage public infrastructure programmes.
1.2.3 Programme 3: Expanded Public Works Programme Programme 3 seeks to ensure the coordination of the implementation of the Expanded Public Works Programme (EPWP) to create work opportunities; and the provision of training for unskilled, marginalised and unemployed people in South Africa.

For 2018/19, Programme 3 is appropriated R2,57 billion20 which proportionally represents 34,4% of the overall departmental budget.
Expenditure under Programme 3 increases at a nominal rate of 6,6% (which translates into a real increase of 1,1%).

The allocations for the Expanded Public Works Programme 19 National Treasury (2018), pp.

211 & 219-220.

20 National Treasury (2018), p. 222.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 21 (EPWP) are mainly for the Integrated Grant for Provinces and Municipalities; and the Performance Based Incentive Allocations.
The allocations are now reported under the following five EPWP sub-programmes: • EPWP: Monitoring and Evaluation receives R57,8 million.

In real terms this sub-programme allocation declines by 12,3% from the previous year.

• EPWP: Infrastructure receives R1,21 billion.

In real terms, this sub- programme allocation decreases by 3,6% from the previous year.

• EPWP: Operations receives R1,21 billion.

In real terms, this sub-programme allocation increases by 6,5% from the previous year.
• EPWP: Partnership Support receives R79 million.

This sub-programme increased by 14,5% in nominal terms and 8,5% in real terms in the allocation from the previous financial year.

• EPWP: Public Employment Coordinating Committee receives R8,1 million.

In real terms, this sub-programme allocation increases by 1,0% from the previous year.

The budget allocation for Programme 3 includes current payments to the value of R326,7 million, of which R178,1 million is allocated to compensation of employees.
Compensation of employees increases with 21,7 million from the R156,4 million of the previous year.

This is to enhance the implementation of Phase III of the EPWP and to provide technical support to departments, municipalities, and the non-State sector to ensure that labour intensive methods and skills training are being utilised in their programmes.

Expenditure on Goods and Services amounts toR148,6 million, (which translates into a real decrease of 7,3 % from the previous year).
Of this total, expenditure on the following items apply:21 • Advertising receives R5,3 million (an increase of R3,5 million).

• Infrastructure and Planning Services receives R23,9 million (an increase of R14 million).

• Agency and Support/ Outsourced Services receives R92,7 million (a decrease of R4,6 million).

• Travel and Subsistence receives R16,4 million (a decrease of R2,1 million).

• Venues and facilities receives R1,9 million (an increase of R500 000).

21 National Treasury (2018), p.222.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 22 [Wednesday, 9 May 2018 The bulk of the expenditure under Programme 3 constitute transfers and subsidies amounting to R2,24 billion, (from the R2,10 billion in 2017/18) representing a nominal increase of 6,7% and (1,4% in real terms).

Of this amount, R1,52 billion is assigned to provinces and municipalities and is allocated as follows:22 • R720,2 million is allocated to Non-profit institutions.
• R692,9 million towards the Integrated Grant for Municipalities.

• R416,0 million towards the Integrated Grant for Provinces.

• R407,9 million towards the Social Sector Incentive Grant to Provinces.

Programme 3’s medium term goals are to:23 • Monitor and report on 4,4 million work opportunities to be created by Public Bodies implementing the EPWP.
• Ensure Public Bodies report on the designated groups (with targets of 55 percent for women and youth respectively, and 2 percent for people with disabilities) in the programme.

• Contract 400 non-profit organisations to implement non-State sector EPWP projects over the medium term.
A number of objectives are outlined, including increasing the Department of Public Works’ participation in the implementation of Public Employment Programmes within the EPWP by March 2019:24 • Public Bodies report 1 455 840 work opportunities in the EPWP Reporting System.

• Produce six Data Quality Assessment Reports.

• Provide technical support to 290 public bodies participating in the EPWP.

22 National Treasury (2018), p. 222.

23 National Treasury (2018), p. 221.

24 National Treasury (2018), p. 211.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 23 1.2.4 Programme 4: Property and Construction Industry Policy and Research25 Programme 4 promotes the growth and transformation of the construction and property industries, as well as a standardised approach and best practice in construction and immovable asset management in the public sector.
Programme 4’s budget nominally increases from an allocation of R4 billion in 2017/18 to R4,25 billion in 2018/19,26 which proportionally represents 57,0% of the overall departmental budget.

This allocation constitutes an increase of 6,2% in nominal terms and 0,7% in real terms.

Programme 4 consists of eight sub-programmes,27 including the Property Management Trading Entity (PMTE), which receives the bulk of the allocation, with R4,01 billion for 2018/19 from the R3,68 billion of the previous year.
This constitutes an increase of R327,2 million in nominal terms and R118,2 million in real terms.

The PMTE was established in April 2006, as part of a longer-term reform programme to provide improved property management services to Client Departments.

With the establishment of the PMTE, all accommodation-related costs were devolved to Client Departments.

In this regard, it has been issuing invoices and collecting user charges from Clients on a quarterly basis, based on amounts devolved to them.
In March 2015, the Department operationalised the PMTE, which resulted in it being shifted (along with its functions), to Programme 4.

A large portion of the budget for 2018/19 is allocated to transfers and subsidies, which amount to R4,22 billion and accounts for 99,3% of the programme budget.

This constitutes an increase of R249,6 million (0,8% in real terms) from the total allocation of R3,97 billion in 2017/18.
25 This programme was known as Property and Construction Industry Policy Regulation which promoted the growth and transformation of the construction and property industries, and uniformity and best practice in construction, and immovable asset management in the public sector.

26 National Treasury (2018), p. 223.


27 Previously, up until 2009/10 the two programmes: Construction Industry Development Programme and the Property Industry Development Programme) fell under Programme 3, but have since been renamed as of the 2014/15 financial.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 24 [Wednesday, 9 May 2018 The sub-programmes below received the following allocations for 2018/19: • Departmental Agencies and Accounts (non-business entities) receives R4,2 billion which is an increase from the R3,8 billion received in 2017/18, of which: o Agrément South Africa is allocated R30 million, (an increase of R1 million) from the R29 million allocation of 2017/18.
o Construction Industry Development Board (cidb) is allocated R73,3 million, (a decrease of R1,7 million from R75 million) and 7,1% in real terms from the previous year.

o Council for the Built Environment (CBE) receives an allocation of R50,1 million, (an increase of R1,5 million from R48,6 million) and 2,3% in real terms.

o Construction, Education and Training Authority (CETA) receives an allocation of R500 000, which remains unchanged from the amount received in 2016/17.
While nominally unchanged, it constitutes decrease of 5,2% in real terms.

o Property Management Trading Entity (PMTE) (as noted above) receives an allocation of R4,01 billion, an increase of 3,2% in real terms.

The Department also made a transfer28 to the: • Independent Development Trust receives an allocation of R28,4 million, (a decline of R82,7 million) from the R111 million allocation of 2017/18.
The Construction Policy Development sub-programme receives an allocation of R46,4 million in 2018/19, which is an increase of R400 000 or 0,9% in nominal terms, but (a decrease of 4,4% in real terms).

The Property Policy Development Programme, receives an allocation of R14,6 million, which is a decrease of R1,1 million, and 11,9% in real terms.

28 National Treasury (2018), p. 224.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 25 Foreign Governments and International Organisations29 receives R27,5 million, an increase of R5,2 million, (16,9% in real terms) from the R22,3 million allocated in 2017/18.

This is mainly to address the fluctuations in the exchange rate when transferring the funds.
The current weakening of the Rand against the major foreign currencies may result in the Department requiring an increase in its allocation from National Treasury.

Current Payments totals R30,5 million, which is a decrease of R700 000 (7,3% in real terms) from the R31,2 million adjusted allocation in 2017/18.
Of this amount:30 • Compensation of Employees, receives an allocation of R13,1 million, which is a decrease of R2,4 million (19,9% in real terms) from the R15,5 million adjusted allocation in 2017/18.

Goods and Services totals R17,4 million for 2018/19.

This constitutes an increase of R1,8 million (5,7% in real terms) from the R15,6 million allocation of the previous year.
Expenditure is intended for the following:31 • Advertising receives R900 000 (an increase of R200 000) from the allocation of R700 000 in 2017/18.

• Consultants: Business and Advisory Services receives R13,6 million (an increase of R3,5 million) from the allocation of R10,1 million in 2017/18.

The following allocations increase by R100 000: • Agency and Support/Outsourced Services receives R800 000 from the allocation of R700 000 in 2017/18.
• Consumables: Stationery, printing and office supplies receives R500 000 from the allocation of R400 000 in 2017/18.

• Communication receives R400 000 from the allocation of R300 000 in 2017/18.

29 National Treasury (2015), p. 193.

This payment is made to the Commonwealth War Graves Commission of which South Africa is a member.

It is comprised of six member countries: Australia, Canada, India, New Zealand, South Africa and the United Kingdom.

30 National Treasury (2018), p. 224.


31 National Treasury (2018), p. 224.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 26 [Wednesday, 9 May 2018 Over the medium term, Programme 4 aims to research and develop:32 • Policies and legislative prescripts for the construction and property sectors.

• Three legislative prescripts for the Public Works Bill, the Construction Industry Development Board Act (No.

38 of 2000) and the Council for the Built Environment Act (No.
43 of 2000) and the Council for the Built Environment Act (2000).

The 2018/19 Targets include:33 • Submit Draft Public Works Bill to the Minister for gazetting for public comment.

• Submit cidb Amendment and CBE Amendment Bills to the Minister for gazetting for public comment.

• Submit the Built Environment Professional Councils Amendment Bills to the Minister for gazetting for public comment.
1.2.5 Programme 5:34 Prestige Policy Programme 5 seeks to provide norms and standards for the Prestige Accommodation Portfolio and meeting the protocol responsibilities for State functions.

The budget for Programme 5 increases to R97,9 million in 2018/19 and proportionally represents 1,3%, of the overall departmental budget.

The increase from the R84,6 million in the previous year represents a nominal of increase of 15,7% and 9,7% in real terms.
A large portion of the budget is allocated to current payments, which amount to R79,2million.

A total of R27,6 million is allocated towards compensation of employees.

32 National Treasury (2018), p. 223.

33 Department of Public Works (2018), p. 106.


34 This programme was known as Auxiliary and Associated Services and sought to fund various services, including: compensation for losses on the Government-assisted housing scheme; assistance to organisations for the preservation of national memorials; and meeting protocol responsibilities for State functions.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 27 The remaining R51,6 million is allocated to goods and services as follows:35 • Minor Assets receives R5,8 million.

• Contractors receives R37,3 million.

• Travel and subsistence receives R3,9 million.

The other R10,6 million of the budget is allocated to Transfers and Subsidies (S&T).
The transfer budget includes an allocation of R10,4 million to Departmental Agencies and Accounts (Parliamentary Villages Management Board), and R8,1 million to Payment for Capital Assets (Machinery and Equipment).

The 2018/19 Targets include the improvement of service delivery services to prestige clients over the medium terms:36 • Develop and monitor six Prestige Policies.

• Support 35 planned State events with movable structures.

• Provide movable assets to Prestige clients within 60 working days.
Human Resources The Department of Public Works has a total of 1 009 positions to the establishment.

This is 281 more compared to the 728 positions in the 2017/18 financial year.

Of these 677 are permanent which is 100 more than the 577 positions that were permanent in 2017/18.

In 2018/19, 196 are additional to the establishment compared to the 758 that were additional in 2017/18.

The Department also has 332 vacant positions37.


The Department is implementing a Talent Pipeline Strategy to address the vacancy rate and the shortage of critical skills.

The Talent Pipeline Programme aims to produce professionals in the Built Environment and Property professions.
The Department developed and implemented an Integrated Human Resource Plan that focused on an intensive recruitment drive to ensure that the Department has the required skills and competencies to deliver on its mandate and objectives.

The Plan further proactively addresses the Department’s long-term requirements.38 35 National Treasury (2018), p. 225.

36 National Treasury (2018), p. 225.

37 Department of Public Works (2018), p. 62.

38 Department of Public Works (2018), p. 62.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 28 [Wednesday, 9 May 2018 2.

The Property Management Trading Entity (PMTE) The DPW describes the purpose and functions of the PMTE as a government component that has been created “… to manage properties under the custodianship of the Department.
In the prior years, the PMTE incurred all the expenses and collected the revenue for the properties (which was recognised by the Department) and not by the PMTE prior to the transfer of functions.
The PMTE was operationalised in the 2015/16 financial year, and the Department transferred certain property management functions, (including the related assets, liabilities and staff), to the PMTE to align the expenses and revenue to the underlying assets.”39 The focus of the PMTE is to execute all property management related functions for National Government.
The PMTE thus implements all public works related functions such as the maintenance of properties, and the payments of property rates on behalf of the Department of Public Works.

All accommodation-related costs were devolved to Client Departments when the PMTE was operationalised.

This means that the Department issues invoices and collect user charges from Clients on a quarterly basis.
In addition to collecting user charges, the PMTE is correctly placed to unlock the value of the large property portfolio of government that is contained in the immovable asset register (IAR).

Together with the collection of user charges the PMTE should theoretically generate funds with which government could undertake maintenance as well as other crucial tasks in the public works sector.

This remains a theoretical challenge that the DPW and PMTE is working to put into action in the medium to long term.
In its meetings with the PMTE, the Committee found that it did not work efficiently as it lacked the relevantly qualified and experienced property specialists.

The Department indicated to the Portfolio Committee that some of the vacancies required by the PMTE included property economists, property managers, specialist chartered accountants, property lawyers, and property valuators.
The DPW reported that these positions were being filled.40 Unfortunately, these specialist skills make it a very competitive terrain meaning that properly qualified and experienced personnel easily move from the PMTE to private property companies.

The challenge is to fill and keep such personnel in positions in the PMTE.

Failure to do this, means that the DPW and PMTE continue to operate at a disadvantage, particularly when signing lease agreements with landlords from the private sector.
39 Department of Public Works (2016), p. 325.

40 Department of Public Works (2013).

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 29 The PMTE struggles to have an authoritative grasp of the value that is contained in the IAR and struggles to invest the property portfolio in manners that benefit the state and its beneficiaries.

Measurement of the state property portfolio remains incomplete and in progress.
The property values stated in the 2015/16 Annual Report represent provisional amounts as measurement initiatives are still in progress.

These values will be updated to comply with the Generally Recognised Accounting Practice (GRAP) Requirements.41 2.1.

The PMTE Budget Allocations to Programmes Programme R million 1.

Administration 2.

Real Estate Investment Services 3.

Construction Project Management Budget 2017/18 2018/19 712,0 117,8 274,9 1 132,9 131,4 318,2 4.
Real Estate Management 10 874,7 10 475,3 5.

Real Estate Information and Registry Services 72,2 108,9 6.

Facilities Management Services 3 202,5 3 269,6 TOTAL 15 254.1 15 436,3 Source: National Treasury (2017/18 and 2018/19) The PMTE receives an allocation of R15,44 billion for the 2018/19 financial year, which is an increase of R182,2 million.

This constitutes a nominal increase of 1,2% (or 4,1% decrease in real terms) from the revised appropriation of R15,25 billion in 2017/18.
41 The PMTE has three years from the date of transfer to measure all assets and liabilities transferred in terms of GRAP 105 and Directive 2.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 30 [Wednesday, 9 May 2018 2.2 Programme 1: Administration provides strategic management, governance and administrative support to the PMTE.

The total allocation for Programme 1 equals R1,13 billion for the 2018/19 financial year, which is an increase of R420,9 million.
This constitutes a nominal increase of 59,1% (or 50,8% in real terms) from the revised appropriation of R712,0 million in 2017/18.42 The following targets are reported for the 2017/18 financial year43: • Settle 100% of all compliant invoices within 30 days.

• • Identify and incubate two new revenue generating sources.

Issue 15 identified User Departments with itemised billing.

• Approve Financial Model.

• Award 60% of bids within the 56 working days of closure of tender advertisement.
• Award 77% of quotations within 30 days from the requisition date.

• Award 75% of procurement spend for bids to designated groups in line with Preferential Procurement Regulations 2017.

• Award 75% of bids to designated groups in line with Preferential Procurement Regulations 2017.

The PMTE continues to drive specific initiatives for implementation over the short to medium term to increase revenue.
This includes the following:44 • Eliminate non-essential expenditure and implement measures to contain costs and ensure that value for money is achieved.

• Let out vacant surplus State-owned properties at market-related rental prices.

• Market the State property portfolio to the public.

• Conduct regular assessments of the leased out properties.

42 National Treasury (2018), p. 228.

43 PMTE (2018), pp.

92-93.

44 PMTE (2017), p. 44.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 31 • Ensure the implementation of debt collection as per the Revenue Management Policy.

• Maintain State-owned properties.

2.3.

Programme 2: Real Estate Investment Services seeks to achieve an efficient and competitive Real Estate Portfolio for the State through effective planning, analysis and informed investments.
The total allocation for Programme 2 equals R131,4 million for the 2018/19 financial year, which is an increase of R13,6 million.

This constitutes a nominal increase of 11,5% (or a real increase of 5,7%) from the revised appropriation of R117,8 million in 2017/18.45 Under the User Demand Management sub-programme the targets are reported as follows:46 • Receive 42 User Asset Management Plans (U-AMPs) from User Departments.

• Sign off on 10 infrastructure work lists.


• Approve the Customer Relationship Management Strategy.

Real Estate Investment Management Services sub-programme plans to:47 • Align four Government Precinct Development Plans with the Integrated Development Plans (IDPs) of identified municipalities (urban and rural).

• Establish three sites for development • Complete five concept designs for identified User Departments.

• Complete 90% of feasibility studies within the scheduled timeframes.
• Complete 90% of valuations within the scheduled timeframes.

• Process 90% of disposal requests by 31 March 2019.

• Submit one Custodian Asset Management Plan (C-AMP) to National Treasury.

• Measure 800 facilities performance in identified performance areas.

45 National Treasury (2018), p. 228.

46 PMTE (2018), p. 98.

47 PMTE (2018), pp.

89-99.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 32 [Wednesday, 9 May 2018 2.4.
Programme 3: Construction Project Management seeks to provide effective and efficient delivery of accommodation needs for the Department of Public Works and User Departments through construction and other infrastructure improvement programmes.

The total allocation for Programme 3 equals R318,2 million for the 2018/19 financial year, which is an increase of R43,3 million.

This constitutes a nominal increase of 15,8% (or a real increase of 9,7%) from the revised appropriation of R274,9 million in 2017/18.
A select number of targets are reported as follows:48 • Approve 83 infrastructure project designs.

• Approve 128 infrastructure projects ready for tender.

• Hand over 105 infrastructure sites for construction.

• Complete 105 infrastructure projects.

• Complete 80% (84) of infrastructure projects within agreed construction period.

• Complete 80% (84) of infrastructure projects within approved budget.

• Create 7 511 Expanded Public Works Programme (EPWP) work opportunities through construction projects.
• Reduce 20% of infrastructure project backlogs in the construction phase.

• Incubate 297 contractors through the Contractor Incubator Programme (CIP).

2.5.

Programme 4: Real Estate Management Services seeks to provide and manage Real Estate Portfolio in support of Government social, economic, functional and political objectives.

The total allocation for Programme 4 equals R10,48 billion for the 2018/19 financial year, which is a decrease of R399,4 million.
This constitutes a nominal decrease of 3,7% (or a real decrease of 8,7%) from the revised appropriation of R10,87 billion in 2017/18.

48 PMTE (2018), pp.

103-104.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 33 A select number of targets are reported as follows:49 • Procure 60% of new leases according to User Departments’ minimum requirements.

• Vacancy rate of 3% on unutilised buildings.

• Sign 600 lease agreements within scheduled timeframes.
• Save R200 million on identified private leases.

• Award 30% of new leases to Broad-Based Black Economic Empowerment companies.

• Reduce 12 private leases within the Security Cluster.

• Increase revenue generation by 10% through the letting of State-owned properties (excluding harbour properties).

• Let out 65% of identified vacant surplus State-owned properties.

• Verify to confirm occupation status of 400 State-owned properties.

Rectify the occupation status of 20 State-owned properties.
• Complete three Spatial and Development Frameworks (SDFs) for identified rural coastal towns.

• Revenue increased by 10% through rental of State-owned and small harbours and coastal properties.

• Create 1 000 work opportunities through the letting of State coastal properties and small harbours.

2.6.
2.6.

Programme 5: Real Estate Information and Registry Services seeks to develop and manage a complete, accurate and compliant Immovable Asset Register to meet service delivery objectives for the State, Department and PMTE business requirements.

The total allocation for Programme 5 equals R108,9 million for the 2018/19 financial year, which is an increase of R36,7 million.

This constitutes a nominal increase of 50,8% (or a real increase of 43%) from the adjusted appropriation of R72,2 million in 2017/18.
49 PMTE (2018), pp.

108-110.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 34 [Wednesday, 9 May 2018 A select number of targets are reported as follows:50 • Process the transfer of 80% of disposals approved in 2017/18.

• Update 100% of immovable assets on the Immovable Asset Register (IAR) of completed infrastructure projects.

• Vest (confirm ownership) of 800 land parcels.

• Physically verify and validate the existence of 19 708 immovable assets.
• Undertake assessments to determine the condition of significant components of 15 031 buildings.

• Asses 9 Provincial IARs for compliance.

• Incorporate 4 National and Provincial IARs into the National Database of State properties.

2.7.
2.7.

Programme 6: Facilities Management seeks to ensure that immovable assets used by Government Departments and the public, are optimally utilised and maintained in a safe, secure healthy and ergonomic environment while contributing to job creation, skills development and poverty alleviation.

The total allocation for Programme 6 equals R3,27 billion for the 2018/19 financial year, which is an increase of R67,1 million.
This is an increase of 2,1% in nominal terms (or a decrease of 3,2% in real terms) from the revised appropriation of R3,20 billion in 2017/18.

A select number of targets are highlighted:51 • Put in place scheduled maintenance contracts for 500 buildings.

• Resolve 15% of unscheduled reported maintenance incidents within agreed timeframes.

• Award 35% of term contracts to the Broad-Based Black Economic Empowerment (BBBEE) companies.

• Reduce energy consumption for identified buildings by 150 000 000 Wh.
• Generate 10 400 000 Wh renewable energy.

• Reduce water consumption for identified buildings by 8 000 000 kl.

50 PMTE (2018), pp.

114-115.

51 PMTE (2018), pp.

118 - 119.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 35 Capital Works and Leasing to provide accommodation The PMTE provides office and residential accommodation to 52 Client Departments.
The accommodation requirements of Client Departments means that the PMTE plans the construction of head office buildings, high courts, precinct developments, correctional centres, and police stations.

It also embarks on construction to upgraded existing buildings and premises.52 In terms of capital requirements this demand for new space by Client Departments equals 966 435 m² and requires a total capital amount of R4,75 billion over the 2018/19 – 2020/21 MTEF period.
The largest demand for space is the South African Police Service (SAPS), that requires 510 215 m², at a total cost of R1,68 billion.

Home Affairs requires the least accommodation space of 9 565 m², at a total cost of R186,1 million over the MTEF period.53 In addition to infrastructure development, an amount of R1,81 billion is required to lease new accommodation space of 471 942 m² over the three-year MTEF period.
The Justice and Constitutional Development User Department requires the largest portion of leasing at 220 000 m², at a total cost of R1,23 billion over the MTEF period.

The Military Veterans requires the least space to be leased at 920 m², at a total cost of R74,6 million over the MTEF period.54 Beyond leasing of new space and capital works, the PMTE also provides for, maintenance services, infrastructure replacement, upgrades and additions.
Infrastructure allocations to PMTE sub-programmes55 Infrastructure Programme R’ million 1.

Departmental 2.

Accessibility 3.

Dolomite Risk Management 4.

Land Ports of Entry Number of Projects 33 100 33 99 Project Description Municipality Output Revised Estimate 2017/18 2018/19 Various Various Various 170,7 Various Various Various 24,5 Various Various Various 114,4 Various Various Various 200,7 5.

Inner City Regeneration 10 Various Various Various 61,8 6.
Prestige Total 54 329 Various Various Various 176,3 748,4 52 PMTE (2018), p. 72.

53 PMTE (2018), p. 72.

The other User Departments are the Departments of Defence, Justice and Constitutional Development, Correctional Services, National School of Government, Labour and Environmental Affairs.

54 PMTE (2018), p. 72.

The User Departments requiring new-leased accommodation include the SAPS, Departments of Rural Development and Land Reform, Health, Labour, Home Affairs and Agriculture, Forestry and Fisheries.
55 PMTE (2018), p. 126.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 180,6 15,3 121 216,6 84,7 186,5 804,7 36 [Wednesday, 9 May 2018 The table above outlines the infrastructure programme of the PMTE, which consist of a total of 329 projects for 2018/19.

A total of R804, 7 million was allocated for 2018/19, an increase of R56,4 million from the R748,4 million revised estimate of 2017/18.
The largest number of projects falls under Accessibility with 100 projects, followed by Land Ports of Entry with 99 projects.

The Accessibility programme’s allocation is the only one that decreased in 2018/19.

The programme declined by R9,2 million to R15,3 million in 2018/19, from the R24,5 million revised estimate of 2017 /18.

The Accessibility programme received the least of the total allocation, namely 1,9%.
The Land Ports of Entry Programme received the largest share, namely R216,6 million, which constitutes 26,9% of the total allocation of R804,7 million for 2018/19.

The allocation increased by R15,9 million to R216,6 million in 2018/19 from the R200,6 million in 2017/18.

The number of projects under the Infrastructure Programme, New Replacement, Upgrades and Additions in the Annual Performance Plan (APP) of the PMTE, differs from that reported in the 2018 Estimates of National Expenditure (ENE).
The total number of projects under the 6 Infrastructure programmes in the APP equal 329, while those reported under the 2018 ENE equal 408 projects.

This constitutes a difference of an additional 127 projects reported in the in ENE compared to the 329 reported in the APP.

Human Resources The PMTE has a total of 6 861 posts on its establishment of which 3 923 are permanent filled positions, and 2 938 are vacant.

A total of 760 positions are filled additional to the establishment.
This may delay the filling of vacant positions.

It brings into question the implementability of what the APP of the PMTE refers to as an integrated Human Resources Plan.

Specifically, the appointment of the requisite personnel achieve its strategic goals is brought into question.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 37 Summary of Critical Occupations - PMTE Critical Occupants56 1.

Architects 2.

Civil Engineering 3.

Chemical Engineering 4.


Electrical Engineering 5.

Mechanical Engineering 6.

Construction Project Management 7.

Quantity Surveyors 8.


Town Planning Total Number of Filled Positions Number of Expected Retirements in a 5-year Period Number of Current Vacancies Total Required 34 11 16 2 3 174 18 15 273 3 - 6 - 1 47 5 2 64 20 21 33 27 21 144 22 18 306 23 21 39 27 22 191 27 20 370 While the table above provides a summary of the critical occupations required by the PMTE to fulfil its mandate, it .
Unlike in the past, the PMTE does not provide a column that indicate the total number of critical occupation positions available on its establishment.

Instead, it reports on the following four areas: • Number of filled positions.

• Number of expected retirements in a 5-year period.

• Number of current vacancies.

• Total required.

Of this amount a total of 273 posts are filled and 64 are reported as the expected number of retirements in a 5-year period.
The PMTE also has 306 current vacancies and 370 total required posts.

The highest vacancy, fall under Construction Project Management with a total of 144 vacancies and 47 number of retirements expected in a 5-year period.

This constitute 191 positions, however, it is unclear where the 174 filled positions fit into the overall staff complement.

The second highest vacancy is under Chemical Engineering with a total of 33 vacancies and shows that six retirements are expected in a 5-year period.
This constitute 39 positions; however, it is unclear where the 16 filled positions fits into the overall staff complement.

56 PMTE (2018), p. 81.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 38 [Wednesday, 9 May 2018 The lowest number of filled posts falls under Electrical and Mechanical Engineering, with respectively two and three positions filled.

However, the Electrical and Mechanical Engineering respectively report vacancies of 27 and 21 positions.
The PMTE has highlighted the challenge in filling these built environment specialist positions.
It is implementing various technical capacity building initiatives to address these requirements; such as the “tailored Capacity Building Programmes57 in partnership with the South African Property Owners Association (SAPOA) and the Coega Development Corporation (CDC); the Professionalisation of Property Managers Programme; Young Professionals Programme; and the Cuban Technical Advisors (CTAs) Programme.” 58 The PMTE plans to place candidates for registration of permanent employees and the youth (participating in the Young Professionals Programme) with service providers contracted with the PMTE to provide training and mentoring.
Once registered, the professionals will be placed in permanent technical positions or linked to Facilities Management Service Centres (workshops)’ maintenance programmes (as specialists in HVACs, Lifts, Boilers etc.

).59 The rest of the report deals with the entities that report to the Minister of Public Works.

4.

Agrément SA (ASA) 4.1.


Setting up the ASA as a legal entity Agrément South Africa (established through a Ministerial Determination in 1969), is one of four entities reporting to the Minister of Public Works.

It was constituted as a juristic person through the Agrément South Africa Act (No.

11 of 2015).60 The Agrément SA has operated independently from 1 April 2018 following the legislative process to establish the entity.61 57 PMTE (2018), p. 81.
The Capacity Building Programmes include: Facilities Manage- ment, Property Management, Construction Management, Certificates for Commercial Property Practitioners, and Property Development.

58 PMTE (2018), p. 81.

59 PMTE (2018), p. 81.

60 Agrément SA (2017), p. ii.

61 Agrément SA (2017), p. 8.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 4.2.

Mandate 39 Agrément South Africa is a statutory Board established in terms of the Agrément South Africa Act (No.
11 of 2015) with the following objectives to:62 • “Provide assurance to specifiers and users of fitness-for-purpose of non- standardised construction related products or systems.

• Support and promote the process of integrated socio-economic development in the Republic as it relates to the construction industry; support and promote the introduction and use of certified non- standardised construction related products or systems in the local or international market.
• Support policymakers to minimise the risk associated with the use of non- standardised construction related product or system.

• Be an impartial and internationally acknowledged South African centre for the assessment and confirmation of that for purpose of non- standardised construction related products or systems.
• Agrément South Africa will discharge its responsibilities through certification of innovative non-standardised products and systems impartially and without undue influence and keep records of the same.” 4.3.

Vision63 To be a world-class centre for technical assessment.

4.4.
4.4.

Mission Enhance Agrément South Africa’s position as the internationally acknowledged, objective South African centre for the Assessment and certification of non-standardised construction related products and systems for which there are no SABS64 standards.

62 Agrément SA (2017), pp.

18-19.

63 Agrément SA, (2017), p. 11.

64 Agrément SA, (2017), p. 30.

The South African Bureau of Standards (SABS) is a statutory body established in terms of the Standards Act (No.

29 of 2008).
29 of 2008).

It is the national institute for the promotion and maintenance of standardisation and quality in connection with commodities and the rendering of services.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 40 4.5.
Stakeholders [Wednesday, 9 May 2018 Agrément South Africa is a founding member (and internationally affiliated through its membership) of the World Federation of Technical Assessment Organisations (WFTAO), which was established in 1996.65 It is a worldwide network for co-ordinating and facilitating the technical assessment of innovation in the construction field.
WFTAO's primary objective is to facilitate the transfer of national products to the global marketplace through the acceptance of technical assessments delivered by its members.

Assessments delivered by a WFTAO member will:66 • “Provide a means of demonstrating the fitness for purpose of the product with building regulations.

• Be more readily accepted by building control personnel.

• Show that the holders manufacturing and Quality Assurance (QA) systems meet high standards.
• Save valuable selling time, by using acceptance of new products in a conservative market.

• Provide a good opportunity for media coverage for the holders to use the distinctive WFTAO logo on advertisements.” In addition to its ties with the WFTAO, it maintains close working relationships with the following government departments, entities and agencies:67 • Department of Trade and Industry.

• Construction Industry Development Board (CIDB).

• Council for the Built Environment (CBE).


• Independent Development Trust (IDT).

65 Agrément SA, (2015), pp.13-14.

Agrément South Africa is one of 23 member organisations from 22 countries across the global market that is internationally affiliated through its membership of the World Federation of Technical Assessment Organisations (WFTAO).
These member countries include: Australia, Brazil, the Czech Republic, Canada, Denmark, Finland, France, Germany, Hungary, Ireland, Israel, Japan, New Zealand, Norway, Poland, Portugal, Romania, the Russian Federation, Spain, United Kingdom and the United States.

66 Agrément SA, (2015), p. 10.


The World Federation of Technical Assessment Organisations is comprised of “officially recognized bodies active in the field of technical assessments for construction products and systems.” 67 Agrément SA (2015), p. 9.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 20 18] 41 • International Council for Building, Research Stud dies and Documentatio on (CID).
• National, prov vincial, and local government departments (for r example the Departmen nt of Human Settlements).

South African n Bureau of Standards (SABS).

South African n National Roads Agency Limited (SANRAL).

• • • National Regu ulator for Compulsory Standards.

• National Hom me Builders' Registration Council (NHBRC).

• Technology a nd Innovation Agency.

• South African n Revenue Services (SARS).

• National Trea asury.

4.6.


Budgetary allocat tions to programmes68 The creation of Agrém ment South Africa as a separate legal entity m means that the organisation requi ires more funding to fill vacant positions t that were fulfilled by the CSIR ( as noted above).

68 Table taken from slide 29 o of Agrément SA’s presentation on the 2018/19 APP.
A ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 42 [Wednesday, 9 May 2018 Agrément South Africa has a total allocation of R34,8 million for the 2018/19 financial year, which is an increase of R6,4 million from the R 28,4 million allocation of 2017/18.

The total budget consists of the following: • R29,9 million – External Income.

• R4,8 million – Other Income.


Apart from the costs for Human Resources (to be discussed below), the Entity reports on the following expenditure: • R15 million – Running Costs, consisting of: o R5,5 million – Other Technical Assessments Costs.

o R3,5 million – Quality Management.

o R803 000 – Building, Equipment Repair and Maintenance.

o R368 000 – Stationary, printing of the Annual Report, newsletters and other leaflets.

• R640 million - Other Costs resulting from deprecation.
Since operating as a juristic personality, Agrément SA reports on the following programmes: Programme 1: Financial Management the following targets are listed: Over the short term period (2017/18 – 2018/19), the programme lists the following targets: • Test and implement practical budget and analysis tools, systems and procedures, • Develop a mechanism of evaluating and reporting financial performance monthly, • Develop standard operating procedures with turn-around times to ensure accurate measurement of supplier performance and supply chain management (SCM) unit.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 43 Over the medium term (2019/20 - 2020-2021), the programme lists the following: • Raise awareness to Agrément South Africa staff of SCM process and standard operating procedures with continuous training including Bid Committee members and other role players, • Develop Agrément South Africa suitable financial plan.
Programme 2: Corporate Services In the 2017/18 financial year, Agrément South Africa identified the lack of specialised skills in the organisation as a potential risk which could affect its ability to fulfil its mandate.
One of the mitigating strategies it was planning to develop was a comprehensive Staff Retention Policy, and improve the remuneration, especially of the technical staff members.69 In its APP for 2018/19 to 2020/2021, the following are listed in response to this identified risk: • HR manager should find the right talent and create the right environment in which people can perform, • Cascading of employee performance to more levels within Agrément South Africa; • Annually conduct customer satisfaction surveys, • Build capacity within Agrément South Africa to be able to conduct customer satisfaction surveys in-house, Implement communication and customer relation plans, • • Conduct awareness surveys annually to determine whether initiative are improving the image and brand of Agrément South Africa, • Measure progress, review and implementation communication and customer relations plans, • Build internal capacity to conduct awareness surveys and compile reports, • Implementation of brand awareness campaigns and communication strategies, • Cascading of employee performance to all employees within Agrément South Africa, 69 Agrément SA, (2017), p. 55.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 44 [Wednesday, 9 May 2018 • Develop a custom/tailored people strategy to the specific business requirements.

This will allow Agrément South Africa to be more competitive in attracting scarce expertise, • Concentrate on developing talent management skills in-house.

These skills are needed all the time.


Programme 3: Information and Communication Technology: • Develop integrated data migration system, • To conduct business process review on a continuous basis, • To upgrade and maintain cost-effective ICT infrastructure and capability, • To guide and control responsible ICT utilisation of users.
The programmes Technical Assessment Evaluations, Product and Systems, and Quality Control deal with the technical assessment, products and systems and quality control through which the entity tests innovative systems and products that are fit for purpose in the built environment and construction industry.

Matters that emerged from deliberations: 4.61.

The entity reported that it had insufficient capacity to deliver on its mandate due to the availability of scarce skills.

4.6.2.
4.6.2.

A lot of innovative material and systems were being developed for use in the sphere of social infrastructure development – storm water systems, foundations, and top structures.

A number of houses in Eastern Cape and Western Cape used systems and materials tested by ASA.

The impact of systems and materials tested by ASA was therefore materially evident.

4.6.3.
4.6.3.

Members made it clear that for impact on the ground to be made effectively and efficiently, the products had to be cheap enough for communities to use.

If it was too expensive, innovative products and systems may be inefficient.

5.

The Independent Development Trust (IDT) The IDT was established in 1990, as a temporary grant-making agency by the former apartheid government.
It was set up with a R2bn government endowment grant that was invested, and the returns was to be used for development purposes in poor communities.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 45 In 1997 the first democratic government changed the IDT’s mandate from being independent to that of a “government agency that will implement projects which are commissioned by government departments”.
The idea was that the invested endowment grant, in combination with project cost which client departments would pay to the IDT, would mean that the entity did not need to be funded by the fiscus.

Unfortunately, the enhanced mandate, and due to the massive social infrastructure backlogs in poor communities, meant that the IDT’s project load was vastly increased.
The cost of projects that should have funded the IDT did not have the desired result as higher number of projects that went unpaid over a long period, actually eroded the capital base of the IDT.

In 2006 in an effort to ensure longer-term sustainability, the IDT initiated a “cost recovery” principle to its projects, Unfortunately, this approach did not bring the financial stability that was required.
Government remains convinced that the IDT has a key role to play as a project manager of social infrastructure construction.

The IDT developed a specific niche in the form of community consultation and participation in decision- making as part of the planning, construction and maintenance of social infrastructure.
The community ownership that was part of its social infrastructure project management is a vital cog in future social development initiatives of government in the Presidential Infrastructure Coordinating Commission (PICC)70.

In the PICC, the DPW is a key role-player in Strategic Integrated Project (SIP) 1371 that addresses the backlog in educational infrastructure.
The IDT is playing a critical role as an implementing agency in the eradication of unsuitable school structures and in the beautification of schools.

In order to consolidate these synergies between the IDT and DPW, government is working on a new business plan, which will see the IDT become a Schedule 3A Public Entity reporting to the Minister of Public Works.
This will enable the IDT to give effect to the 1997 Cabinet mandate to be “a government development agency that will implement projects which are commissioned by government departments”.

70 http://www.gov.za/sites/www.gov.za/files/PICC_Final.pdf 71 http://www.publicworks.gov.za/PDFs/Speeches/Minister/Launch_for_SIP_13.pdf ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 46 [Wednesday, 9 May 2018 5.1.
An Overview of the 2018/19 Annual Performance Plan The IDT is set up as a strategic partner in the management, integration and implementation of certain government’s development programmes.

It plays a key role as implementer of social infrastructure projects.

It also assists the Department of Public Works in efforts to address the priorities of job creation and sector skills development.
The IDT further contributes to the work of other entities in the built environment and construction industry through the promotion of alternative construction initiatives in the building of school infrastructure.

It also invests in professional registration of built environment employees, and supports human resources and talent development.
The role of the IDT in addressing the priorities of job creation and skills development sees the entity play a key part in EPWP projects with other departments and municipalities.72 In its Annual Performance Plan, the IDT claims that it mainly generates income from management fees derived from managing the implementation of social infrastructure projects on behalf of government.

In spite of this claim, it actually struggles to collect management fees from departments and municipalities.
The IDT was unable to generate revenue as per the claim made in its Annual Performance Plans since 2014.

It ascribes this challenge in its presentation to the Committee as “Owing to operational, governance and financial challenges experienced over the last three years”.

The IDT has been unstable in terms of both financial income as well as management and government has had to take steps to reposition and renew it.
This process of renewal and repositioning was approved by the Board and included an Operating Model and Turnaround Plan.

The Executive Authority and the Department of Public Works has assisted to secure transition funding, as a structured response to the entity’s mentioned operational and financial challenges.
To assist the entity, the DPW made an allocation from Programme 4: Property and Construction Industry Policy and Research of R28,4 million that is a decline of R82,7 million from the R111 million allocation of 2017/18.

72 IDT (2017), p. 16.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] The IDT reports on two programmes: • Programme 1: Integrated Service Delivery.

• Programme 2: Administration.


47 The business focus strategy includes strengthening of new business growth areas within the social infrastructure sector.

It also plans to focus on the implementation of some of the long- and medium-term outcomes of the Turnaround Strategy, such as: • Expansion of the revenue base and confidence-building; • Corporate and financial governance; • Reputation Management Plan; and • Finalisation of the IDT Business Case.
In its APP, the IDT showed a budget for 2018/19 amounting to R6,12 billion which is a decrease of R1,5 billion from the R4,67 billion of 2017/18.
The IDT lists the following under revenue73: Management Fees (Confirmed) Management Fees (New Business) Management Fees (Non-State Sector EPWP) BECPS Revenue Government Grant 135,888 135,000 42,127 28,176 28,362 Other income The Revenue of the IDT consists of the following:74 7,000 • Management Fees: Confirmed - R135.9 million for 2018/19 (a decrease of R38.5 million) from the R174.4million for 2017/18.
• Management Fees: New Business - R135 million for 2018/19 (an increase of R104.9 million) from the R30.1 million for 2017/18.

• Provision based on 5.0% of gross Management Fees for 2018/19 (from the 4.9% in 2017/18), an increase of 0.1% in 2018/19.

73 Amounts in this and the following table are in million rands.

74 IDT (2018), p. 50.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 48 [Wednesday, 9 May 2018 • Management Fees: NSS EPWP R42.1 million for 2018/19 (an increase of R13.5 million) from the R28.7 million for 2017/18.

• BECPS Revenue R28.2 million for 2018/19, a 100% from the 0 allocation in 2017/18.

• Government Grant: R28.4 million in 2018/19 (a decline of R82.7 million) from the R111.1 million for 2017/18.
• Investment Income: R7 million in 2018/19, (a decline of R4.1 million) from the R11.1 million reported in 2017/18.

This makes up the total income of R376,5 million for the 2018/19 financial year.
The overheads totals R 349,2 million consisting of the following: Employee costs Costs to restructure the IDT BECPS costs Travelling and Accommodation Consultation fees Legal costs Operational expenditure 200,506 - 10,931 23,972 9,692 11,616 92,440 This means that for 2018/19 the IDT shows operational expenditure (OPEX) of R27,4 million.

The IDT shows Capital Expenditure amounting to R69,9 million.

This means that for this financial year, the IDT shows a deficit of R42,5 million.

5.4.
5.4.

Challenges noted In 2017/18, the IDT reported on challenges related to the migration of the financial reporting system.

The Great Plains financial reporting system migration process resulted in:75 • Material take-on balances and had an impact on the underlying financial information and account balances within Project Accounting Revenue and Accounts Receivable Environment.

75 IDT (2017), p. 9.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 49 • Capturing of supplier invoices into the system timeously, particularly related to the expenditure of funds transferred by Client Departments to the IDT.

• The lack of standardised processes, adequate supervisory controls, requisite skills and resources compounded the capturing of supplier invoices.
The IDT has implemented Standard Operating Procedures (SOPs), automation and built-in system controls and capacitating critical functional areas.

Matters that emerged from deliberations: 1.

The critical matters reported on in the 2017/18 financial year, remain largely the same.

The entity continues to face cash flow challenges.

National Treasury was aware of the matter and was working with the IDT and DPW to find a working solution.
In 2014 already National Treasury published an instruction note (04 of 2014/15) that prescribed market-related management fees that the IDT may charge departments, constitutional institutions and public entities listed in schedule 2 and 3 of the PFMA (1999).

The Committee noted that the IDT received a grant transferred from the DPW’s Programme 4 totalling R28, 3 million and in spite of this, it continues to run at a deficit for the year amounting to R42,4 million.

2.
2.

In the previous financial year the Committee stated that “the process of transforming the entity into a more relevant and sustainable one for the future as contained in a new business case was being drafted and processed to Cabinet in collaboration with relevant departments such as National Treasury, and the Department of Public Service and Administration.” This year it states that urgent intervention is required as the IDT is not operating as a business should.

3.
3.

Due to the urgency of transforming the IDT, and the nature of governance challenges, the Committee requested that a specific date be set aside to engage in a focused manner on these challenges.

6.

The Construction Industry Development Board (CIDB) The CIDB reported that it underwent a collaborative and consultative process to change its mission, strategic goals and indicators.
It presented it as follows: ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 50 Strategic mission [Wednesday, 9 May 2018 The CIDB presented a reviewed mission that stated the following: “We exist in order to regulate and develop the construction industry through strategic interventions and partnerships”.
Strategic goals and indicators to reach the stated mission: An inclusive, growing construction industry: To transform the construction industry by increasing infrastructure spend to support and reflect the demographics of South Africa.

Indicators: • Percentage construction Gross Fixed Capital Formation of GDP.

• Percentage public Sector Contract Awards Index.

• 5-Year Independent Review and Impact Assessment.


Innovative and thriving construction industry: Provide mechanisms and support to enterprises to be competitive and sustainable and to deliver value for money within the construction industry.

Indicators: • Percentage contractor and PSP satisfaction with clients’ index.

• Percentage client satisfaction with contractors and PSPs index.

• Percentage artisan development index.


Be a reputable regulator: To regulate the construction industry in the public interest to ensure a fair, inclusive, ethical, transformed, enabling and reputable construction environment.

Indicators: • Code of Conduct Investigations Finalised within 6 Months.

• Percentage sanctions per 1 000 Contractors (Grades 2 to 9).

• Percentage Register of Contractors (ROC) effective index.

• Percentage Register of Project Compliance index.


• Percentage Provincial Performance Index.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 51 Working in Alliance: Pursuing progressive partnerships and alliances with industry stakeholders to achieve cidb's strategic intent.

Indicator: Percentage CIDB Perception and Acceptance index.

Sound corporate governance: An effective, efficient adequately structured well- governed and sustainable institution.
Indicator: A clean audit outcome.

The budget is the main resource to achieve the above stated goals: 2017/18 2018/19 2019/20 1.

Administration 2.

Regulation and Advocacy 75 967 64 710 77 693 82 044 67 628 71 415 3.

Development and Capacitation 13 303 13 914 14 693 4.

Industry Performance and Transformation 14 497 15 188 16 039 Total 168 477 174 423 184 191 The total programme budget for the CIDB equals R174.4 million for 2018/19, an increase of R5.9 million from the R166.5 million in 2017/18.
The allocation for the four programmes is as follows:76 • Administration received R77.7 million for 2018/19, (an increase of R1.7 million), from the R75.9 million in 2017/18.

• Regulatory and Advocacy received R67.6 million (an increase of R2.9 million), from the R64.7 million in 2017/18.

• Development and Capacitation received R13.9 million (R611 000), from the R13.3 million in 2017/18.
• Industry Performance and Transformation increased by R691 000 from the R14.5 million in 2017/18 to R15.2 million in 2018/19.

76 CIDB (2018), p. 75.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 52 [Wednesday, 9 May 2018 The revenue of the CIDB for 2018/19 consists of the following: • Government Grant - R73.3 million (a decline of R1.7 million), from the R74.9 million in 2017/18.

• Registration Fees – R92.8 million (an increase of R7.2 million) from the • R85.6 million in 2017/18.
• Finance Income – R8.3 million (an increase of R794 000) from the R7.9 million in 2017/18.

Matters that emerged from deliberations with the CIDB: 6.1.

The CIDB Board stated that it faced a challenge with capacity erosion at senior and executive management level.

This affected governance systems so that it was showing signs of being underdeveloped.
The problem requires urgent attention as: 6.1.1. the Office of the Auditor-General and the Department of Monitoring and Evaluation reported that the entity was not submitting the required reports and documentation.

6.1.2. the OAG reported that the CIDB could not get a clean audit as the matter of irregular expenditure could not be properly investigated as the entity did not provide the necessary documentation to assist with a completed auditing process.
6.1.3. vacancies at senior and executive managerial levels remain unoccupied which leads to financial systems, organisational, and governance weaknesses.

6.3.

The matter of a sustainable skills development pipeline for the construction and built environment was discussed with the CIDB.

The CIDB aims to improve the skills development pipeline by providing learners with access to workplace learning opportunities by 2020.
It allocated R1 million to ensure that a target of 4 000 learners would be assisted to enter artisanship.

Work in this regard is on-going with the Departments of Basic Education, Higher Education and Training, and Further Education and Training (FET) colleges.

6.4.

In the previous financial year, the Committee emphasised that the CIDB had to ensure that a review of the criteria according to which contractors progressed along grades was done.
It was not clear whether this matter was sufficiently highlighted in the 2018/19 APP.

This had to include a review of ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 53 the adjustment of grades so that more contractors could be enabled to access the market.

Equitable distribution of work is crucial.

The adjustment would ensure that lower graded contractors, are able to move into higher grades.

6.5.
6.5.

The need to review the CIDB Act continues to be a matter that requires attention.

This is part of the work of the DPW as regulator and policy-maker of the public works sector.

The Property and Construction Industry Policy and Research branch has to urgently deliver on stated reviews of all the legislation and policy as per the Strategic Plan 2014-2019.
A lack of delivery in this regard has impacted negatively on the public works entities such as the CIDB and the impact it could make to the built environment professional sector.

7.

The Council for the Built Environment (CBE) The CBE is a schedule 3A entity established by the Council for the Built Environment Act (No.

43 of 2000).
43 of 2000).

“The CBE and Professional Councils in the built environment value chain are to regulate those Built Environment Professions who conceptualise, design, build, maintain and transfer social and economic infrastructure.”77 The six Built Environment Professional Councils (BEPCs78) are the: 1.

South African Council for Architectural Professions (SACAP).

2.

Engineering Council of South Africa (ECSA).

3.

South African Council for the Project and Construction Management Professions (SACPCMP).

4.
4.

South African Council for the Landscape Architectural Profession (SACLAP).

5.

South African Council for the Quantity Surveying Profession (SACQSP).

6.

South African Council for the Property Valuers Profession (SACPVP).

77 CBE (2015), p. 10.


Through the Act, the CBE is tasked with regulating and governing the following six Built Environment Professions: Architects, Engineers, Landscape Architects, Quantity Surveyors, Project and Construction Managers and Property Valuers, through the six Professional Councils that were also enacted through legislation.
78 Note that the BEPC has now been changed to Councils for the Built Environment Professions (CBEP) in the 2018/19 APP ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 54 [Wednesday, 9 May 2018 The CBE is a Statutory Council established in terms of the CBE Act as an overarching body for the six Built Environment Professions and mandated to:79 1.

“Promote and protect the interest of the public in the built environment.

2.
2.

Promote and maintain a sustainable built environment and natural environment.

3.

Promote on-going human resources development in the Built Environment.

4.

Facilitate participation by the Built Environment Professions in integrated development in the context of national goals.

5.

Promote appropriate standards of health, safety and environmental protection within the built environment.

6.

Promote sound governance of the Built Environment Professions.

7.
7.

Promote liaison in the field of training in the Republic and elsewhere and to promote the standards of such training in the Republic.

8.

Serve as a forum where the Built Environment Professions can discuss relevant issues.

9.

Ensure uniform application of norms and guidelines set by the Professional Councils throughout the Built Environment.” 7.2.

Key Priorities of the CBE The CBE highlighted the following ten priorities for the Medium Term Strategic Framework (MTSF):80 1.
“Ensuring that Built Environment (BE) academic programmes curricula addresses issues of Labour-Intensive Construction, implementation of the Infrastructure Delivery Management System (IDMS), Sustainable Development and Health and Safety.

2.

Promotion of high demand skills for Strategic Infrastructure Projects (SIPs).

3.
3.

Stepping up mechanisms, programmes, projects and interventions to drive transformation and ensure adequate representation of woman and black people within the BE through the CBE Transformation Model.

4.

Maths and Science Support Programme to reach learners in Grade 8 to 12 by 2018.

79 CBE (2015), p. 19.

80 CBE (2015), p. 12.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 55 5.
Establishing a structured candidacy programme for candidates and interns to address bottlenecks in the skills pipeline.

6.

Supporting workplace training of BE graduates/candidates and interns to bolster competencies and to promote professional registration.

7.

Strengthening the technical capacity of Local, Provincial and National Government.

8.
8.

Aligning the policy planning and reporting processes of Built Environment Professional Councils the (BEPCs) to the Government’s planning cycles and the Government’s priorities.

9.

Strengthening monitoring and regulatory work on delegated public functions of the BEPCs.

10.
10.

Enhancing internal systems, controls and capabilities to allow the organisation to deliver on its mandate and strategic goals.” 7.3 Planned Programme Performance for 2018/19 This section outlines the planned performance under the CBE’s five main programmes.

However, a brief note of the changes in the names of the programmes is highlighted below.
In 2013/14, the names of the four programmes of the CBE were: Administration; Built Environment Academy Programme; Centre for Innovation and Integrated Planning; Public Protection and Education in the Built Environment.

81 The CBE left Programme 1 unchanged from that in 2014/15 but renamed the last three programmes in 2015/16 as illustrated in the table below.

Changes in Programme Names between 2014/15 and 2015/16 Programme Name 2014/1582 Programme Name 2015/16 1.

Government Policies and Priorities 1.


Government Policies and Priorities 2.

Skills Development in the Built Environment 2.

Skills for Infrastructure Delivery 3.

Research and Information in the Built Environment 3.

Built Environment Research, Information and Advisory 4.

Public Interest 4.

Regulation and Oversight of 6 BEPCs 81 CBE (2014), p. 49.

82 CBE (2015), p. 61.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 56 [Wednesday, 9 May 2018 The CBE has once again changed the composition of some of its programmes, from four Programmes to five, as illustrated in the table below: Changes in Programme Names between 2016/17 and 2017/18 Programme Name 2016/17 Programme Name 2017/1883 1.

Government Policies and Priorities 1.

Administration 2.

Skills for Infrastructure Delivery 2.

Skills for Infrastructure Delivery 3.


Built Environment Research, Information and Advisory 3.

Built Environment Research, Information and Advisory 4.

Regulation and Oversight of 6 BEPCs 4.

Regulation and Oversight of 6 BEPCs 5.

- 5.

Government Policies and Priorities Programmes 2, 3 and 4 remain unchanged.

However, Programmes 1 and 5 were altered as illustrated above, with Programme 1 reported as Administration and the former Programme 1: Government Policies and Priorities was changed to Programme 5.
The CBE’s programmes for 2018/19 have remained unchanged from that of the previous financial year.84 However, the acronym for Programme 4 BEPCs, the Built Environment Professional Councils, has been changed from (BEPCs), to Councils for the Built Environment Professions (CBEP).85 The strategic priorities and planned performance per programme were reported on as follows: Programme 1: Administration Strategic Objective: Ensure that the CBE has the necessary capacity and capability to support government’s development priorities within the Built Environment (BE).
Programme 1 receives an allocation of R42,0 million for the 2018/19 financial year and constitutes 78,2% of the Entity’s total allocation of R53,7 million.86 This is an increase of R1,7 million from the R40,3 million for 2017/18.

83 CBE (2017), p. 25.

84 CBE (2018), p. 46.

85 CBE (2018), p. 3 & 66.

86 CBE (2018), p. 43.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 57 The CBE reports that the budget for Programme 1 will increase by 1% during the 2018/19 financial year.87 The budget for Programme 1 increases by R1,7 million or 4,3% in nominal terms.
However, the CBE reports that the budget allocation for this programme will increase by 1% during the 2018/19 financial year.88 Programme 2 reports on the following three programme indicators that are to be completed by 31 March 2019: 89 • Fully implement a CBE Information Technology (IT) Governance Framework, in line with the Department of Public Service and Administration (DPSA) Corporate Governance of ICT Policy Framework.
• Implement an Electronic – Built Environment (E-BE) System in any three CBEP90 by 31 March 2019.

• Unqualified Audit Report on financial statements, with no material findings for the 2017/18 financial year.
Programme 2: Skills for Infrastructure Delivery Strategic Objective: Drive and facilitate skills development and transformation in the BE.91 Programme 2 receives an allocation of R9,2 million for 2018/19 and constitutes 17,1% of the total programme allocation.92 This constitutes an increase of R1,9 million from the R7,3 million allocation in 2017/18.

The major cost drivers of this Programme are:93 • Maths and Science support programme for Grade 12 learners.
• Increasing career awareness of Built Environment professions at school level.

• Refinement of the pilot project on the Integrated Workplace Training Model for candidates and interns.

The budget for Programme 2 increases by R1,5 million (or 25,7% in nominal terms) for 2018/19.

87 CBE (2018), p. 47.

88 CBE (2018), p. 47.

89 CBE (2018), p. 50.

90 CBEP – Council for Built Environment Professions.

91 CBE (2018), p. 53.

92 CBE (2018), p. 42.

93 CBE (2018), p. 52.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 58 [Wednesday, 9 May 2018 Programme 2 reports on the following seven programme indicators that are to be completed by 31 March 2019: 94 • A Strategic Infrastructure Projects (SIPs) implementation plan for two categories of high demand Built Environment Professions (BEPs) Architects and Town Planners, approved by the CEO.

• 150 Grade 12 learners enrolled in CBEs Maths and Science Support Programme.
• 50 new Candidates/BE graduates in Work Place Training.

• 100 interns placed and accessed for work integrated learning.

• One Oversight Report on the Accreditation Academic Programmes undertake by the CBEP.

• Four Metropolitan municipalities engaged on the implementation of the CBE Structured Candidacy Framework.

• One Annual Transformation Indaba hosted and reported on to the Department of Public Works.
Programme 3: Built Environment Research, Information and Advisory Strategic Objective: Provide informed and researched advice to Government on Built Environment priority matters identified in the 2014 MTEF.

Programme 3 receives an allocation of R790 000 for the 2018/19 financial year and constitutes 1,5% of the total budget.
This constitutes a decrease of R1,7 million from the R2,5 million allocation in 2017/18.95 In its APP the CBE showed that Programme 3 was allocated an increase in its budget of 6.6% due to the following key cost drivers, namely, research; portal for research information; knowledge and information gathering; publication and stakeholder forums.96 The budget allocation for Programme 3 actually declined by R1,7 million for the 2018/19 financial year.
The anomaly is that the CBE stated that the programme’s budget allocation was increased by 6,6%.

94 CBE (2018), p. 58.

95 CBE (2018), p. 42.

96 CBE (2018), p. 60.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 59 Programme 3 reports on the following four programme indicators that are planned for completion by 31 March 2019: • Report on initiatives to support infrastructure skills within Government.
• One research report analysing the impact of the Standards for Infrastructure Procurement and Delivery Management (SIPDM) on attracting and retaining BEPs within the Department of Public Works.

• One advisory report on Health and Safety Regulations within the public sector developed and submitted to the Department of Labour.

• One advisory report on BEPs role in the Expanded Public Works Programme (EPWP) developed and submitted to the EPWP branch.
Programme 4: Regulation and Oversight of Six CBEP97 Strategic Objective: To act as an appeal body on matters of law referred to it in terms of legislation regulating the Built Environment Professions and to promote and ensure high standards of professional ethics.98 Programme 4 received an allocation of R1,3 million for 2018/19, which constitutes 2,5% of the total allocation.
This is an increase of R408 000 from the R913 000 allocation received in 2017/18.99 Programme 4s budget will increase by 6,7% in the 2018/19 financial year.

The major cost drivers remain:100 • The appeals function.

• • Information dissemination to the public.

Identification of Work (IDoW) activities.

Clarify the reported increase of 6,7% above, given that Programme 4s budget increases by R408 000 or 44,7% in nominal terms, for the 2018/19 financial year?
Programme 4 reports on six programme indicators to be completed by 31 March 2019: 101 97 Note that the acronym for Programme 4 has been changed from Built Environment Professional Councils (BEPC), to Councils for the Built Environment Professions.

98 CBE (2018), p. 66.

99 CBE (2018), p. 42.

100 CBE (2018), p. 66.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 60 [Wednesday, 9 May 2018 • Finalise 100% of appeals within the statutory 60 days of their judgement.
• Implement 50% of the deliverables of the IDoW Action Plan approved by Council.

• A report on the six CBEP implementation of the King IV Corporate Governance Framework, submitted to Council and the Department of Public Works.

• An implementation plan for the six CBEP alignment of their policies with the Ministerial approved Policy Framework, developed and approved by the COO and CEO.

• Develop and implement a Regulatory Framework on oversight of CBEP.
• Six CBEP’ Strategic Plans, APPs and Annual Report submitted to the Department of Public Works.

Programme 5: Government Policies and Priorities Strategic Objective: Built Environment academic curricula and CPD102 programmes that embody issues [such as] health and safety in construction, environmental sustainability and job creation through labour intensive construction and the IDMS.103 Programme 5 received an allocation of R429 000 in 2018/19 and constitutes 0,8% of the total allocation.
This is a decrease of R15 000 from the R444 000 allocation in 2017/18.104 The entity stated that an implementation plan to incorporate health and safety, sustainability, labour-intensive construction and the Infrastructure Delivery Management System (IDMS into BE academic curricula had to be completed by 31 March 2019.105 101 IDT (2018), p. 69.

102 Continuous Professional Development.

103 Infrastructure Delivery Management System.

104 CBE (2018), p. 42.

105 CBE (2018), p. 74.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 61 The strategic priorities and planned performance per programme were reported as follows: Programme 1: Administration Strategic Objective: Ensure that CBE has the necessary capacity and capability to support government’s development priorities within the Built Environment (BE).
Programme 1 receives an allocation of R42,0 million for the 2018/19 financial year and constitutes 78,2% of the Entity’s total allocation of R53,7 million.106 This is an increase of R1,7 million from the R40,3 million for 2017/18.

Programme 2: Skills for Infrastructure Delivery Strategic Objective: Drive and facilitate skills development and transformation in the BE.
Additionally, this programme will aim to translate the knowledge generated from its pilot projects into frameworks/action plans for large-scale cooperative implementation of facilitation and assistance of such.107 Programme 2 receives an allocation of R9,2 million for 2018/19 and constitutes 17,1% of the total programme allocation.108 This constitutes an increase of R1,9 million from the R7,3 million allocation in 2017/18.
The budget for this programme will increase by 6,6% in the 2017/18 financial year, with the major cost drivers being: 109 • The roll out of Maths and Science support programme for grade 12 learners and increasing awareness at school level of Built Environment professions as viable career choices.

• The refinement of the pilot project on the Integrated Workplace Training Model for candidates and interns.
Programme 3: Built Environment Research, Information and Advisory Strategic Objective: Provide informed and researched advice to Government on Built Environment priority matters identified in the 2014 MTEF.

106 CBE (2018), p. 43.

107 CBE (2017), p. 29.

108 CBE (2018), p. 42.

109 CBE (2017), p. 30.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 62 [Wednesday, 9 May 2018 Programme 3 receives an allocation of R790 000 for the 2018/19 financial year and constitutes 1,5% of the total budget.
This constitutes a decrease of R1,7 million from the R2,5 million allocation in 2017/18.110 Programme 3 reports an increase in its budget of 6,6% due to the following key cost drivers, namely, research; Portal for research information; knowledge and information gathering; publication and stakeholder forums.111 Programme 4: Regulation and Oversight of Six BEPCs112 Strategic Objective: To act as an appeal body on matters of law referred to it in terms of legislation regulating the Built Environment Professions and to promote and ensure high standards of professional ethics and conduct within the Built Environment.
113 Programme 4 received an allocation of R1,3 million for 2018/19, which constitutes 2,5% of the total allocation.

This is an increase of R408 000 from the R913 000 allocation received in 2017/18.114 The major cost drivers remain:115 • Appeals function.

• • Information dissemination to the public.

Identification of Work (IDoW) activities.


Programme 5: Government Policies and Priorities Strategic Objective: Built Environment academic curricula and CPD116 programmes that embody issues [such as] health and safety in construction, environmental sustainability and job creation through labour intensive construction and the IDMS.117 110 CBE (2018), p. 42.

111 CBE (2017), p. 31.

112 Built Environment Professional Councils (BEPCs).

113 CBE (2017), p. 47.

114 CBE (2018), p. 42.

115 CBE (2017), p. 33.


116 Continuous Professional Development.

117 Infrastructure Delivery Management System.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 63 Programme 5 received an allocation of R429 000 in 2018/19 and constitutes 0,8% of the total allocation.

This is a decrease of R15 000 from the R444 000 allocation in 2017/18.118 The main cost driver of Programme 5 Transformation.119 is the benchmarking study on 7.4.
Human Resources The CBE has a total of 39 approved posts of which 36 were filled and three were vacant.120 The CBEs staff establishment for 2018/19 was stated as:121 • Executive Management: Three.

• Senior Management: Nine.

• Highly Skilled: Professional: 14.

• Skilled Administrative: Nine.

• Semi-Skilled: Two.

• Unskilled: Two.

The CBE reported the following acting positions:122 • Company Secretary.

• Manager: Skills Development.


The CBE reports that vacant positions are in the process of being filled, however, the entity indicated that the post of the Company Secretary has been halted and is currently executed in a dual responsibility arrangement, (with the Manager Regulations and Legal Services), acting in the position.123 118 CBE (2018), p. 42.

119 CBE (2018), p. 74.

120 CBE (2018), p. 31.

121 CBE (2018), p. 30.

122 CBE (2018), p. 29.

123 CBE (2018), p. 28.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 64 [Wednesday, 9 May 2018 The CBE reports that the entity’s current establishment is not adequate to execute its mandate.
Of particular concern was Programmes 2 and 3 as it did not show evidence of having the required capacity “to fulfil the projects in their schedules.” The CBE forged “partnerships with key stakeholders such as institutions of higher learning, research institutions and Voluntary Associations (VAs) to leverage resources.”124 A total of R26,3 million is allocated towards Compensation of Employees, a decline of R529 000 from the R26,9 million allocation in 2017/18.
A further R212 000 is allocated towards Training and Staff Development, an increase of R68 000 from the R144 000 allocated in 2017/18.

125 Governance matters to note: The CBE’s 4th Term Council’s tenure ends in mid 2018/19, and the appointment of a new Council is expected to take place during that period.126 The CBE reported that it has 13 concurrent functions with the CBEP.
The CBE Act provides that the CBE “has primary jurisdiction in all Built Environment Professions (BEP) matters, lack of cooperation from some CBEP has compromised the implementation of some functions.”127 8.

Matters noted from deliberations with the DPW, PMTE and entities: 8.1.

Key function areas of the Department continues to be hampered: 8.1.1.
The Committee was concerned that the APPs of the DPW and PMTE did not sufficiently address the critical task of maintaining the buildings of client departments that provide services to the people.

The Committee stated that client departments have to use the allocated R100 000 per maintenance incident to do daily maintenance tasks.

8.1.2.
8.1.2.

The Committee was concerned at the lack of implementation detail in the APP on proactive steps through which it would develop maintenance plans and service level agreements with client departments.

124 CBE (2018), p. 25.

125 CBE (2018), p. 43.

126 CBE (2018), p. 9.

127 CBE (2018), p. 25.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 65 8.1.3.

The Committee indicates that the management of leasing requires urgent attention.
The Department should accelerate the appointment of professional personnel in the PMTE.

Similarly, the filling of key leadership positions of the PMTE must be given priority.

8.2.

The Committee noted a lack of cooperation between entities in the built environment sector.

This requires urgent attention to ensure the coordinating of built environment professional skills development and contractor development to give effect to the policy directives of the Minister.

8.3.
8.3.

The Committee expressed its concern at hearing from the Office of the Auditor-General (AG) that the auditing of the PMTE’s systems remained incomplete.

This concern was amplified as the matter of vacancies and the appointment of adequately skilled and experienced personnel to the PMTE had been consistently raised as a matter that had to be resolved.

8.4.

The Committee noted the clean audit opinions that the AG expressed on the financial statements of the CBE and Agrément South Africa.

8.5.
8.5.

The Committee was alarmed at the high vacancy rate of the PMTE in its management and professional structures.

This slows down the operationalisation efforts of the PMTE and hampers service delivery.

8.6.

The Committee expressed its concern about the vacancies at senior and executive management level that continue to appear in reports on the structures of the CIDB and IDT.

This could be part of the reason why these entities struggle to get clean audits and to efficiently deliver on their mandates.
8.7.

The Committee stressed the important role of the IDT as a project management agency of government to ensure the building of social structure infrastructure such as clinics, hospitals, courts, police stations, libraries, and schools.

It is alarmed at the dire financial situation of the entity.

It is disgusted that governance weaknesses has led to this being a characteristic of the IDT.
The DPW must urgently intervene to address the financial, administrative management, and governance weaknesses that has become a feature of the entity.

8.8.

The Committee repeats128 its concern at the lack of delivery of the review of the Public Works White Papers by Programme 4 of the DPW that was shifted to the 2019 five-year administrative term.

This is contrary to the 128 This was expressed in meetings and in the Committee’s Budgetary Review and Recommendation Report in 2017/18.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 66 [Wednesday, 9 May 2018 targets stated in the 2014-2019 Strategic Plan of the DPW and the subsequent Annual Performance Plans.

The Committee continued to express its concern that the Public Works Bill and amendments to the mandates of the CIDB and the CBE were not going to be achieved in this term.

It noted that some of the challenges experienced in the DPW, PMTE and the relevant entities originate from this work being incomplete.

8.9.
8.9.

The Committee noted that while the 2018/19 APP mentioned the Immovable Asset Register, the seriousness of delivering on whether and how the register was going to be effectively updated to make land available for other targeted outcomes of government such as transport, housing, health, security and schooling was not sufficiently addressed.

8.10.
8.10.

The Committee also noted that the PMTE had to take the necessary steps to develop the Infrastructure Programme Implementation Plans (IPIPs), User Asset Management and Client Asset Management planning tools in cooperation with client departments and, where relevant, provincial departments, and municipalities.

8.11.

The Committee recognised the results of the DPW’s turnaround plan that was started in 2012.
The work of the Governance Risk and Compliance Branch had the effect of addressing corruption in the department’s dealings with the private construction industry and the built environment.

Further steps need to be taken to ensure that corrupt activities can be detected earlier rather than later in the procurement and reporting phases of operations.

8.12.
8.12.

The Committee noted the planned target stated to settle all registered invoices within 30 days as important to ensure that especially emerging Black contractors and sub-contractors are able to continue doing business.

8.13.

The Committee noted that the leadership changes in the DPW and the entities create governance and administrative weaknesses that increase the risk of corrupt activities and deepen compliance challenges.

8.14.
8.14.

The Committee notes that while the APP of the PMTE and the CBE refers to the critical need for built environment professional training of young people, it does not show evidence of its interrelationship with the Department of Higher Education and Training, the technical vocation and Further Education Sector, and Sector Education and Training Agencies (SETAs).

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 67 8.15.
The Committee notes the key role of phase three of the EPWP to ensure employment opportunities for the marginalised communities.

It stressed the importance of strengthening the administrative and data verification component of the EPWP branch.

It further stressed that the training component of the programme must be implemented through on-going work with the relevant SETAs, the Further Education and Training Sector, and the private industry.

9.
9.

Recommendations The Committee recommends to the Minister of Public Works that the following be reported on in the third quarter of 2018 and in the first quarter of 2019: 9.1.
The Minister as policy leader, ensures that the delay in the Review of the White Papers is urgently addressed so that: 9.1.1. the mandate of the Department is properly spelled out, so that blockages in performing optimally, are removed, and the draft Public Works Bill is concluded, and submitted to Parliament; 9.1.2. the legal mandates of the built environment profession entities are amended to streamline and focus on the matter of relevantly transforming the built environment and construction sector; 9.1.3. the turnaround plan of the IDT is escalated for the transformation of the IDT into a properly resourced, socially relevant entity that is enabled to project manage social infrastructure projects, as well as collect the necessary fees with which to run its business in a financially sustainable manner.
9.1.4. the DPW with the PMTE to report and present to the Committee on data showing how large contractors are sub-contracting 30% of business to emerging black contractors in the construction industry, and on the status of payments of registered invoices within 30 days.

The report and presentation to include regulatory steps that the DPW as policy leader developed and concrete steps that the administration has taken to ensure that this policy is effectively implemented.

9.2.
9.2.

The Department and the PMTE report on the escalation of appointing vacant management and property professionals in key branches such as key accounts management to professionalise the PMTE so that government properties are well maintained.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 68 [Wednesday, 9 May 2018 9.3.
The PMTE to report on the key responsibility to develop Infrastructure Programme Implementation Plans (IPIPs), User Asset Management, and Client Asset Management planning tools in cooperation with client departments and, where relevant, provincial departments, and municipalities.

9.4.
9.4.

The Department to present to the Committee by September 2018 on the Talent Pipeline Strategy to address the vacancy rate that appears in the reports to the Committee to address the shortage of critical skills in the Department, PMTE and the Public Works entities.

9.5.
9.5.

The Department, CBE and CIDB to present to the Committee on progress with its plans to consolidate, develop and manage the built environment skills development pipeline with State and non-State stakeholders; and to provide detail on the establishment of the Professional Service Branch within the Department to increase its institutional capacity.

9.6.
9.6.

The IDT and the EPWP programme head to provide a comprehensive presentation to the Committee in the third term of 2018 on all matters related to the Memorandum of Agreement according to which the EPWP Data Management Centre is being run under the auspices of the IDT.

The presentation should show the impact of this function to enhance the coordination of implementation, funding and reporting of participating bodies and stakeholders across the three spheres of Government.

9.7.
9.7.

The IDT to present to the Committee the relevant details of how it planned to collect increases in its management fees from client departments at national and provincial spheres and municipalities.

9.8.

The PMTE to present to the Committee on progress with the Planning and Precinct Development Services sub-programme that drives rural precinct development.

The presentation to show efforts to address spatial imbalances and under development that remain part of rural towns and villages.

9.9.
9.9.

The PMTE, with DPW to present on progress with small harbour development in provinces of the Eastern Cape, KwaZulu-Natal, and the Northern Cape with an emphasis on unlocking economic opportunities for the rural poor through, amongst other programmes, Operation Phakisa.

9.10.

The CIDB to do a progress report on its efforts to fight corruption with emphasis on collusion by cartels in the construction industry that hamper the growth of emerging black-owned contractors.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 69 9.11.

The DPW and PMTE to provide regular updates on the Immovable Asset Register to report to the Committee on whether and how the register was going to be effectively updated to make land available for other targeted outcomes of government programmes in the sectors of transport, housing, health, security , and schooling was not sufficiently addressed.

9.12.
9.12.

The DPW to provide update reports on leadership stability and outcomes of the work of the Governance Risk and Compliance Branch in addressing corruption in the department’s dealings with the private construction industry and the built environment.

9.13.
9.13.

The DPW’s EPWP branch to report to the Committee on efforts through which it: 9.13.1 creates employment opportunities for the marginalised communities and assists other departments, provincial departments and municipalities to create jobs; 9.13.2. intergovernmental efforts through which the training component of the programme is strengthened with the relevant SETAs, the Further Education and Training sector, and the private industry.

Report to be considered.

3.
Report of the Portfolio Committee on Communications on its deliberations of Budget Vote 3: Communications, dated 9 May 2018 The Portfolio Committee on Communications (the Committee), having considered Budget Vote 3: Communications’ Annual Performance Plans (APPs) for 2018/19 – 2020/21 of the Department of Communications (the Department), Government Communication and Information System (GCIS), the South African Broadcasting Corporation (SABC), the Independent Communications Authority of South Africa (ICASA), the Films and Publications Board (FPB), the Media Development and Diversity Agency (MDDA) and Brand South Africa (BSA), reports a follows: ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 70 1.
Introduction [Wednesday, 9 May 2018 Section 55(2) of the Constitution of the Republic of South Africa, Act 108 of 1996, states that the National Assembly must provide for mechanisms (a) to ensure that all executive organs of state in the national sphere of government are accountable to it; and (b) to maintain oversight of (i) the exercise of national executive authority including the implementation of legislation; and (ii) any organ of state.
In terms of the Public Finance Management Act (PFMA), the Accounting Officers must provide Parliament or the relevant legislature with their respective institution’s Medium-Term Strategic Framework (MTSF) and where applicable with its Annual Performance Plan (APP).

The Money Bills Amendment Procedure and Related Matters Act was promulgated in 2009, and provides Parliament with powers to reject or recommend the approval of departments’ budgets.
The Act also makes provision for the implementation of recommendations emanating from the committee’s oversight reports.

The Committee met with the Department and GCIS on 17 April 2018; ICASA, BSA and FPB on 18 April 2018; SABC, MDDA on 19 April 2018 for consideration of their APPs 2018/19 – 2020/21.

The Department had a total budget allocation of R1.

520 billion.

2.
520 billion.

2.

The Department’s APP 2018/19 – 2020/21 2.1 Strategic outcome-oriented goals The Department derives its mandate from the President’s pronouncement when establishing the department, and these are: • Develop an overarching communications and broadcasting policy and strategy.

• Provide information dissemination and publicity to promote an informed citizenry.

• Brand South Africa abroad to assist the country promote investments, economic growth and job creation.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 71 The Department has set itself the following strategic goals and strategic objectives which will be achieved when implementing the mandates: • Effective and efficient strategic leadership, governance and administration.

• A responsive communications policy regulatory environment and improved country branding.

• Transformed communications sector.


2.2 Situational Analysis per programme 2.2.1 Situational Analysis (Programme 1) The Department remains focused on addressing the human resources capacity challenges through the prioritisation and filling of critical positions and also ensuring that its oversight role on public entities is strengthened and stabilised.

Most of the positions on the departmental approved organisational structure are not funded.
The total number of funded posts is 81 and 74 of these posts are filled and seven are vacant, and this translates to a vacancy rate of 8.6%.

In terms of Employment Equity (EE), females at Senior Management Service (SMS) level account for 10 (53%); and males nine (47%).

People with disabilities constitute 1% of the entire staff complement.

The development of the 2018/19 and outer years plans come in the midst of a distressed fiscus, largely due to an under-performing economy.
This has resulted in the Department not being allocated a baseline budget necessary for the implementation of its plans, hence it had to rely on the GCIS to provide shared services – that include Internal Audit (until May 2018) Information Technology, Facilities, Security Management and Wellness services.

The Department was not able to fully implement its mandate as some of the units on the organisational structure are partially capacitated and others are completely not capacitated.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 72 [Wednesday, 9 May 2018 The Department was not able to meet some of the legislated commitments such as the Skills Development Act, 1998 (Act 97 of 1998), which requires that 1% of the personnel budget be allocated for employee training and development, including the implementation of the internship programme.

However, the Department would provide for the WSP through reprioritisation.
Despite the challenges experienced, the Department had by and large ensured that there was better accountability over the allocated limited resources, hence the Department managed to obtain clean audits in the last two years.
The increasing demands for delivery which was not matched to the requisite resources could result in the quality of services being adversely affected, as well as resulting in regression from clean audits Over the medium term, R436.8 million or 9% of the total budget baseline allocation will be used for operational costs, of which R263.2 million or 60% is to be spent on compensation of employees and R173.7 million or 40% on goods and services.
The department will increase its headcount of permanent staff with 13 posts at a cost of R5.5 million, mainly to capacitate the DTT project, Communications Policy, Research and Development and Entity Oversight programmes.

2.2.2 Situational Analysis (Programme 2) 2.2.2.1 Audio-Visual and Digital Content Act The Broadcasting policy was being reviewed to develop a new policy and regulatory environment that supports the growth and development of the audio visual and digital content industry.
Government announced that there was broad consensus on the need for a new legislative and regulatory review as the broadcasting policy was outdated and not relevant to the emerging digitally converged communications landscape.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 73 During the 2016/17 financial year, the Department commenced with the process of developing the Audio-Visual and Digital Content Act.
The process of achieving the Act would follow the development of the Green Paper, White Paper and the Bill, and after various consultations the Act would be submitted to Parliament.

In 2017 the draft White Paper was drafted, it acknowledged and also underlined the central and important role that the all the State Owned Enterprise’s (SOE’s) would play in order to achieve the goals of the NDP 2030.
2.2.2.2 The Media Diversity and Development Amendment Act The current Media Diversity and Development Amendment Act had some significant shortcomings as it was no longer appropriate to deal effectively and efficiently with changes underway in the contemporary digital media industry.
The MDDA Amendment Bill would improve the sustainability of the community and small commercial media sector in South Africa given the financial pressures being brought to bear on the community media as a result of audience fragmentation and increasing competition for readers, viewers and audience.
This Bill would also address the issues related to the review, realignment and rationalising of state institutions to ensure that they create an enabling environment for the development and support of community media in pursuit of the objective of media diversity.
It would provide the MDDA with new duties relevant to the fourth industrial revolution and digital developments, and ensure that the MDDA discharges its mandate adequately, and reinvent and reconfigure itself to ensure effective compliance from the sector it supports.
2.2.2.3 South African Local Audio-Visual and Digital Content Industry Strategy It was acknowledged that whilst in the recent past significant progress in the increase of local content has been recorded, there was an urgent need to implement a coherent strategy for localising content as an economic and cultural industry.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 74 [Wednesday, 9 May 2018 It therefore becomes clear that South Africa cannot move into the new digital broadcasting environment while being wholly dependent on foreign-produced and sourced content.
The collaborative efforts of government and its institutions also recognised that the existing support mechanisms for the production of music, TV and multimedia content had not been sufficient to encourage the requisite explosion of South African content necessary to ensure that content was easily accessible across the ever-expanding platforms.

This content development strategy would support independent producers, SMMEs, etc and allow for entry by new innovative content providers.
This was also intended to prepare South Africa to be able to create and/or take up regional, continental and global opportunities arising from the introduction of new digital platforms.

2.2.2.4 The Media Transformation and Diversity Charter The development of the media transformation and diversity charter was responding to government’s call to identify and review ownership patterns that remain largely untransformed.
In the 2017/18 financial year, the Department developed a Media Transformation and Diversity discussion document.

The focus for the current MTEF was to develop, approve and implement the Media Transformation and Diversity Charter.

Specific focus of the charter will be on ownership; management, control and employment equity (EE); skills development; preferential procurement and enterprise development as well as socioeconomic development.
The Media Transformation and Diversity discussion paper makes recommendations to address the identified challenges.

The Charter would assist government to explore additional policies to promote media diversity other than through government advertising and support through established agencies, as this had proved to be inadequate.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 75 2.2.3 Situational Analysis (Programme 3) With its intergovernmental and stakeholder management function the department would provide strategic IGR and Stakeholder Management support and promote collaborations with the sector.

It also aimed to advance South Africa's interest in broadcasting and media policy in regional and international forums.
It would also focus on international engagements and partnerships in promoting investment in media and broadcasting skills development, capacity development and NDP goals.

Engagement with the three spheres of government, key partners and stakeholders to promote the mandate of the department.

The Department would consider bilateral engagements with stakeholders on matters of mutual interest.

Such engagements could happen in different formats and at various levels based on sound cooperative processes.
These engagements would seek to share information on the Department’s strategic objectives such as digital migration, media transformation, broad communications policy development and community media development.

Furthermore, the engagements would seek to address stakeholders’ legitimate concerns, develop relations/collaborations/ partnerships and open formal communication channels.
2.2.4 Situational Analysis (Programme 4) The department has adopted the Policy Framework and Procedure on Oversight and Governance of Public Entities and Statutory Institutions.

The purpose of the policy was to strengthen the oversight on SOE’s.
It would also assist in regulating the relationship between the Executive Authority and the entities, in particular outlining the principles, structures and the modus operandi of how the Minister exercises oversight over the entities and how the entities complied with governance prescripts.

The Department had a duty to ensure that SOE’s deliver upon their mandate, adhere to good governance practices and were financially viable.
In ensuring an effective entity oversight, the Department would ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 76 [Wednesday, 9 M May 2018 be developing devel lop tools such as accountability instrum ents and MOI.

More attention n to ensure stability of leadership in ou ur SOE’s would be prioritized, together with the financial Sustainability.
An estimated R3.098 8 billion or 63% of the department’s budg et would be transferred to public entities for the implementa ation of communications and broadcasting policies.

3.

Departmental l budget allocation and programmes The Department was allocated a budget of R1.3 billion for the 2016/17 financial year, and R R1.425 billion for the 2017/18 financial y years and R1.526 billion for t the 2018/19 financial years as illustrated d in the Graph 1 below.
This s represents a steady increase of 6 per cent over the medium term period in allocation.

Graph 1 1,550 1,500 1,450 1,400 1,350 1,300 1,250 TOTA D L DoC BUDGET OVER MTEF PERIOD 1,520 1,425 1,3 345 2016/ /17 2017/18 2018/19 It will remain the pre erogative of the Committee within the medi ium term to interrogate and co onsult (with relevant stakeholders such as s DPME, Treasurer, and DPS SA) on whether the Budget vote is ad dequately funded.
The Comm mittee, through its oversight mechanis ms, has identified that the lac ck thereof of adequate funding for this bud dget will ANNOUNCEMENTS, TABLING GS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 20 18] 77 result in unintende d consequences thereby reversing the positive progress achieved t thus far by government.

And further de erail the Department in meeti ing its mandate of transforming this critic al sector of the new democr ratic State.
Parliament therefore should be in a position to establish whether the budget allocation and the 6 per cent steady increase over the medium term will suffice.
The Department had d allocated its budget per programme as il llustrated : in the graph 2 below: Graph 2 DoC B 0 BUDGET PER PROGRAMME R' 000 1,331 1,542 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 62,7 771 8,492 22,290 0 Program mme 1 Programme 2 Programme 3 Program mme 4 The overall staff co mplement has seen an increase over the medium term from 55 in 2 2014/15 to 85 in 2016/17 financial yea ars.
The Department's compen nsation of employee’s budget has been red duced by R3.6 million for 20 017/18 and 2018/19.

After consultation with the Department of Public c Service and Administration (DPSA) and National Treasury, the Departm ment will finalise, develop and implement a plan to manage its personn nel expenditure within this reduced exp penditure ceiling.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS A NO 57─2018 78 [Wednesday, 9 May 2018 It is equally important to make mention that despite the reduced expenditure ceiling, the Department is operating at half the approved staff complement.

3.1 Programme 1: Administration The purpose of this programme is to provide strategic leadership, management and support services to the department.
The strategic objective of the programme is to ensure compliance with statutory requirements and good governance practices by 2019.

In order to do this the functions of the department under this programme are organised into ten sub-programmes with annual targets.

The programme aligns with Outcome 12: An efficient, effective and development-oriented public service (Sufficient technical and specialist professional skills and a public service that is a career of choice).
The sub-programmes are Human Resource Management and Development (HRM&D), Information and Technology management (IMT), Facilities and Security management services; Communications, Legal Services, Strategic planning and Performance Monitoring, Financial management, Accounting and Administration; Supply Chain Management, Risk Management and Internal Audit.
In line with its commitments to efficient service delivery and as a measure to curb slow expenditure, under sub-programme: Financial Management, Accounting and Administration the Department has set as its target to spend 100% of the budget according to the plan and ensure 100% compliance with invoices within 30 days.

This was the only major change in terms of performance targets set under programme 1 when comparing to the APP of 2017/18.
The department’s budget was categorised into five broad sub-programmes.
The graph below presents the expenditure trends and estimates by sub- programme ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 20 18] 79 Graph 3: Appropriatio on: Programme 1: Administration 2017/18 2018/19 2019/20 34,00 08 28,370 2 28,282 17,233 15,682 11,986 13, 686 10,892 10,049 2,445 832 967 10,375 10,017 10,700 Ministry Depa Mana rtmnetal agement Internal Audit Corporate Services Financial t Management A significant portio on (R28 370 000) of the appropriation goes to Departmental Manage ement.
The graph shows a steady decline ov er during the medium term parti icularly when comparing to the 2017/18 finan ncial year.

3.2 Programme 2: Communications Policy, Researc ch and Development The purpose of this s programme is to conduct research and develop communications and b broadcasting policies.

The programme is has t three sub- programmes with fo our annual targets.

The three sub-program mmes are Broadcasting Policy, M Media Policy and Technology and Engineerin ng Level.
The number of target ts in this programme for the financial year r 2018/19 have decreased from t ten to four.

During the medium term, program mme two will focus on legisla ation and policy overhaul in order for po olicy and legislation to meet th he changing needs of the sector as a resu ult of the convergence and adva ances in technology.

The department’s bud dget is presented according to three sub-prog grammes.
The budget is presente ed in the graph below: ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS A NO 57─2018 80 [Wednesday, 9 M May 2018 Graph 4: Appropriati ion; Programme 2: Communications Policy, Research and Development 11,784 8784 2,712 1,750 12000 10000 8000 6000 5517 4000 2000 0 1,382 1 158 2017/18 2018/19 2019/20 Broadacsting p policy Media Policy Technology and Engineering g Services In line with the depar rtment’s plan to overhaul the country’s broa adcasting and media policy in o order to meet the changing needs of a sector o operating in a highly advanc ced technological environment and mee eting the communication needs of citizens; R8 784 000 of the budget is all ocated to broadcasting policy fo note that the budget al or the 2018/19 financial year.
The Committe llocated for Media Policy sub-programme is c ee should combined with the budget for su ub-programme Broadcasting Policy for this financial year.

Furthermore, ove er the medium term the budget under sub-pro ogramme one will increase sub policy and legislation.

bstantially as the Department endeavours ch hanges in 3.3 Programme 3 : Industry and Capacity Development The purpose of this pr rogramme is to manage enterprise developmen nt, digital migration, and industr ry research and analysis.
Furthermore, it has to ensure the implementation of a structured programme of engagem ent with stakeholders in suppor programme has four su rt of the department’s programmes and proje ub-programmes with a total of four Annual ta ects.

This argets.

The programme’s fu functions are organised into the followi ing sub- programmes; Enterpris se Development, Broadcast Digital Migration n Industry Research and Analys Management.
is and Intergovernmental Relations and Sta akeholder ANNOUNCEMENTS, TABLING GS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 20 18] 81 Graph 5: Appropriatio on; Programme 3: Industry and Capacity Deve elopment 2017/18 2018/19 2019/20 48,062 47,196 20,540 2754 2,922 3,289 3,530 1940 0 2,321 2,321 Enterprise Development Broadcasting Digital Migration Industry Research and Analysis Interg Rela Sta Man givernmental ations and akeholder nagement Broadcast Digital Mi gration is the department’s flagship project t and the majority of the budg get allocated under this programme is allo ocated to Broadcast Digital M Migration.
The amount of R48 062 000 h has been allocated for the 2018/ /19 financial year.

3.4 Programme 4 : Entity Oversight The purpose of this pr rogramme is to monitor the implementation o f policies by SOEs and regulator ry institutions, and provide guidance and ove ersight on their governance ma atters.

There are four sub-programmes un nder this programme with five a annual targets.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS A NO 57─2018 82 [Wednesday, 9 M May 2018 Graph 6: Appropriatio on; Programme 4: Entity Oversight 2017/18 2018/19 2019/20 678,089 637,359 595,750 585,447 554,372 523,489 233,762 220,674 20 05,121 1,500 1,7801,670 Programme Management for Entity Oversight Br Co roadcasting and mmunity Media Communication and Branding Regulatory Institutions Strategy and Policy Alignment 3.5 Expenditure A Analysis The NDP envisages an active citizenry that participates in th he social, economic and politica al life of the country.
In the main the Depa artment’s work contributes in p articular to Outcome 14 (Nation-Building an nd Social Cohesion) of the 20 014 – 2019 MTEF.

Over the medium t term, the Department would con ntinue to transform the communication sector r through the roll out of the DTT T project, develop a responsive communicatio ons policy and regulatory frame ework as well as driving effective publ lic entity oversight within the co ommunications sector.
The Department will also fund other operational and p d. personnel requirements over the MTEF period 3.5.1 Responsive co ommunications policy and regulation frame ework Over the medium term m, the Department will continue to develop p policies that will improve government communications and dr rive the communications secto or in the right direction.

It is within this contex xt that the Department will be d developing the Media Transformation and Diversity Charter, which aims to o transform the media.
ANNOUNCEMENTS, TABLING GS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 83 The Department will continue to develop and implement several policies and regulation over the medium term such as the Audio-Visual and Content Bill, which will address new developments in the sector; digital convergence; media transformation and diversity policy which encourages diversity of content and transformation of media ownership the community broadcasting support strategy, which aims to maintain and strengthen citizen participation and access to the community media sector.
Complete switch-over to the digital mode of transmission will avail HDTV telecast facilities to the viewers in terrestrial modes.

Community radio / satellite radio services and FM radio services will be expanded to cover the entire population.
The DTT programme aims to promote and develop broadcasting and media services in South Africa, and framing up appropriate policies and strategies for optimum use of South Africa’s soft power in the broadcasting sectors and to position South Africa as a global power in these fields.

The legislation governing the entities will be reviewed to effect appropriate changes to the broadcasting and media sectors such as the FPB, MDDA and ICASA.
The Department has successfully submitted the White Paper on Audio-Visual and Digital Content Policy for South Africa to Cabinet for approval towards the development of the draft Audio-Visual and Digital Content Bill over the medium term.

The policy will provide enabling mechanisms to facilitate ownership of new audio-visual digital content value chain in previously disadvantaged communities and SMMEs.
Following the approval of the Audio-Visual and Digital Content act, the Department will commence with the ICASA Amendment Bill during 2020/21.

The ICASA Amendment Bill seeks to align the role of ICASA to respond to the digital environment ensuring, for example, online services are adequately regulated.

In promoting the growth and development of the creative industries sector, the Department will develop an Audio-Visual Content Strategy.
It will also continue to support the parliamentary processes of finalising and implementing the Films and Publications Amendment Bill and the Broadcasting Amendment Bill.

The strategy cost R850 000, comprising gazetting, travelling, consultations in all the provinces and parliamentary processes.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 84 [Wednesday, 9 May 2018 The Department will continue to strengthen and support the South African Broadcast Production Advisory Board (SABPAB), whose responsibility is to advise the Minister on how the development, production and display of local TV and radio content can be supported.

For the 2018/19 financial year, the advisory body is to provide at least two reports on policies related to children’s content and funding for sport development.
The other policy work relates to the regulation of the Over-The-Top (OTT) broadcasting and content services in 2018/19.

The overall expenditure over the medium term is projected to be R2.568 million in 2018/19, R2.651 million in 2019/20 and R3.347 million in 2020/21 within the Broadcasting Policy subprogramme for the Communications Policy, Research and Development programmes.
3.5.2 Transforming the communications sector through the roll-out of DTT Effective implementation of the DTT project will set our country on a higher growth trajectory and release spectrum for broadband services.

The available STBs and other DTT-related devices will be installed and distributed across the provinces situated along the borderline with neighbouring countries, namely Mpumalanga, Limpopo, KwaZulu-Natal and the Eastern Cape in the 2018/19 financial year.
The main objective is to migrate all TV-owning households in order to mitigate potential frequency interference with neighbouring countries.

The Department will also coordinate public awareness and registration campaigns in the provinces and target non-subsidised households that rely on retail market to acquire migration devices (STBs and integrated TV sets as well as commercial satellite decoders).

To achieve this objective, a targeted approach will be employed focusing on a transmitter service area.
Over the MTEF period, more awareness and registration campaigns will be carried out.

Focus will be placed on provinces along the board line areas, Gauteng and Western Cape, where there is potential signal interference followed by the inland areas where there is no frequency potential interference with neighbouring countries.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 85 A baseline budget allocation of R77 million has been over the medium term for the roll-out of the DTT project.

These activities are budgeted for under the BDM subprogramme, within the Industry and Capacity Development programme.
The Department plans to use these funds mainly for project management, awareness campaigns, media engagement (Radio, TV and print), technology and engineering support, monitoring and evaluation of the programme performance.

3.5.3 Driving effective entity oversight The Department is required to exercise oversight on planning, budgeting and reporting processes of public entities within its portfolio to enable them to meet government’s policy objectives in a financially and sustainable manner.
To ensure that the public entities are managed effectively, efficiently and prudently, the Entity Oversight unit will compile 10 annual reviews of their corporate plans or strategic plans; compile 20 quarterly reports annually to assess compliance to the Public Finance Management Act (PFMA), 1999 (Act 1 of 1999), the Companies Act, 2008 (Act 71 of 2008) and National Treasury Regulations of the public entities.
In addition to assessing the entities ‘alignment with government’s priorities and their financial sustainability and soundness of governance, the review aims to identify possible risks and mitigate their possible effects.

Similarly, the performance of public entities is evaluated on quarterly and annual basis through the submission of reports.
An estimated R3.098 billion or 63 % of the Department’s budget will be transferred to public entities for the implementation of communications and broadcasting policies.

A total of R1.383 billion or 28 % of the total budget will be transferred to the GCIS to continue focusing on providing strategic communications, facilitating active citizen participation, including conducting research on government communication strategies and compiling communications products such as the Vuk’uzenzele newspaper.
3.5.4 Funding of operational and personnel requirements Over the medium term, R436.8 million or 9 % of the total budget baseline allocation will be used for operations costs, of which R263.2 million or 60 % is to be spent on compensation of employees and R173.7 million or 40 % on goods and services.
The Department will increase its headcount of ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 86 [Wednesday, 9 May 2018 permanent staff with 13 posts at a cost of R5.5 million, mainly to capacitate the DTT project, Communications Policy, Research and Development and Entity Oversight programmes.

4.

Other Department (GCIS) within the vote and Department’s SOEs The Department has another department within the budget vote, which is the GCIS and also has five other entities reporting to it.
Graph 7 below is indicative of budget allocation for 2016/17 per entity reporting to the Department with the exception of the GCIS which is allocated R 382.3 million of the total Departmental budget: Graph 7: Budget allocation of entities Budget Allocation of Entities Reporting to the Department 86274 181186 23814 182,093 414,481 ICASA SABC MDDA BRANDSA FPB In terms of percentage allocation, and as mentioned previously ICASA received the most allocation of the total allocation to entities from government at (31 per cent) over the medium term.
The Committee will have to engage with relevant stakeholders so as to understand the rationale behind allocation of current budget to the Department versus the rationale for allocation to entities and the hierarchy.

There must be a systematic approach to how allocation is made as an extension of the reflection of the relevance of institution to attaining the NDP goals and upholding constitutional values.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 4.1 GCIS 87 The mandate of GCIS is derived from section 195(g) of the Constitution, which stipulated that the public should be provided with information that is timely, accurate and accessible.

This is in support of the constitutional principles of freedom of expression, transparency and openness of government.
GCIS is responsible for providing strategic leadership and coordinating government communication to ensure that the public is informed and has access to government programmes and policies that benefit them.
GCIS has the following strategic goals (i) A responsive, cost-effective, compliant and business-focused organisation; (ii) Professionalise the communication system by building a reliable knowledge base and through communication products; (iii) Enhance the image of government; and (iv) Maintain and strengthen a well-functioning communication system that proactively informs and engages the public.
GCIS has the following strategic objectives: (i) Provide adequate and effective Corporate Services functions in pursuit of good governance; (ii) Produce government’s communication products and services to grow share of voice of government messages in the public arena; (iii) Provide strategic leadership and support in government communication through public opinion research and analysis of media coverage to understand the communication environment and inform government messages; (iv) Provide efficient and effective communication services; (v) Manage the corporate identity for national government; ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 88 [Wednesday, 9 May 2018 (vi) Implement a proactive and reactive media engagement system by building, maintain and improving relations with the media and drive the government communication agenda; (vii) Improve interdepartmental coordination by joint planning and sharing of messages across the three spheres of government to ensure coherence and alignment of government messages; and (viii) An informed and empowered citizenry on government’s policies, plans, programmes and achievements to increase public participation in government.
4.1.1 Situational Analysis Government’s mandate requires that its communication be expanded to enhance access to information that enables the public to participate in the country’s transformation and in bettering their own lives; that it should bring the realities of our emergent and thriving democracy to the attention of the international community, promote the African Renaissance, including regional integration and implementation of people-centred development programmes.
The media and communication environment forms a critical part of the service-delivery environment of the GCIS and has over the financial year been volatile with activity.

Issues in the environment are focused on an upsurge in political activity and increased activism by civil-society organisations over a range of issues.

This leads to a fast-moving and complex communication environment, with rapidly changing media reporting on new and developing issues.
Through this heightened political activity, government communicators have to work much harder to ensure that government’s voice is prominent in the media and its campaigns are effectively implemented.

Together with Media24, the GCIS facilitated an Apex leadership and the Digital Publishing training programmes.

These year-long programmes were meant to enhance the GCIS communicators’ communication and leadership skills.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 89 In order to maximise the reach of government, Information was delivered through channels such as community radio talk shows, taxi ranks and malls activations and blitzes on commuter trains in partnership with the Passenger Rail Agency of South Africa; talk shows at local community radio and television stations; open days, especially at Thusong Service Centres; dialogues; door-to-door/household visits, and project walkabouts and inspections.
The GCIS’s in-house media bulk-buying service is designed to save advertising costs for government while maintaining the visibility of government’s communication campaigns.

During the 2016/17 financial year, 332 media-buying campaigns were approved and implemented for various programmes and services.

The cost of the advertising was R227 million.


Over the medium term, the department expects to handle 1 690 requests each year for media production services such as photographic, video and graphic-design services for client departments.

It aims to provide more than 1 713 communication services.

Going forward, the GCIS will have to ensure that its reach and impact is not interrupted by its ability or inability to retain talented and skilled staff.
The GCIS comprises mostly of employees between the ages of 20 and 39 years, who constitute 54.75 percent of the total establishment.

Since employees in the aforesaid age-group still aspire for career mobility, growth and development, intervention strategies in the form of retention, succession planning and career management have been developed to ensure that competent and talented staff are retained in the organisation.
4.1.2 Programmes and strategic objectives The mandate of the GCIS is derived from section 195(g) of the Constitution, which stipulates that the public should be provided with information that is timely, accurate and accessible.

This is in support of the constitutional principles of freedom of expression, transparency and openness of government.
The Department is responsible for providing strategic leadership and coordinating government communication to ensure that the public is informed and have access to government programmes and policies that benefit them.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 90 [Wednesday, 9 M May 2018 4.1.2.1 Programme 1 1: Administration The purpose of the e programme is to provide strategic le eadership, management and sup port services to the department.
There are six sub- programmes under th his programme; they are departmental man nagement, strategic managemen t, human resources, information managem ment and technology, financial administration and internal audit.

Furtherm more, the programme has nine performance indicators and ten performance e targets.

There were no signific cant shifts in this programme with regard to ta argets set when compared to the APP of 2017/18.

The programme’s bu udget is broadly presented according to f five sub- programmes.
The budg get is presented in the graph below: Graph 8 Appro opriation; Programme 1 Administration 2017/18 2018/19 2019/20 57.3 54.2 52.4 5 55.7 56.9 1.8 5 39.6 37.5 31.8 8.2 8.8 6.6 8.1 8.6 9.3 Departmental Management Corporate Services Financial Administration Internal Audit Office ccomodation Ac The majority of the budget under this programme is spread between Corporate services (R R54 million) and office accommodation (R56 6 million) respectively for the 20 018/19 financial year.
4.1.2.2 Programme 2 : Content Processing and Dissemination The purpose of this programme is to provide strategic leade ership in government communi cation to ensure coherence, coordination, con nsistency, quality, impact and re esponsiveness of government communicatio on.

There ANNOUNCEMENTS, TABLING GS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 20 18] 91 are three sub-program mmes which are products and platforms, po olicy and research and commu unications services agency.
There is a tot al of 19 performance indicator rs and 19 performance targets under the progra amme The programme’s bu udget is broadly presented according to f four sub- programmes.
The budg get is presented in the graph below: Graph 9: Appropr riation; Programme 2 Content Process ing and Dissemination 2017/19 2018/19 2019/20 50.7 50.5 52.5 57.6 54.2 54.4 38.3 36.3 35 3.6 3.8 4.1 Programme Management for Content Processing & Dissemination Policy and Research Products and Platforms Comm Service unication es Agency In line with its str rategic objective of sharing government messages; Communication Service e Agency received the most funding; R58 m million for the 2018/19 financial y year and set to increase in the medium term.
4.1.2.3 Programme 3: Intergovernmental Coordinatio on and Stakeholder Manage ment Purpose of this progr ramme is to implement development comm unication through mediated an nd unmediated communication channels an nd foster sound stakeholder rela ations and partnerships.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS A NO 57─2018 92 [Wednesday, 9 M May 2018 There are three sub -programmes under this programme there e are 14 programme indicators s and 14 annual performance targets.
The th hree sub- programmes are medi a engagement, cluster communications and p provincial and local liaison.
Graph 10: Appropria ation; Programme 3: Intergovernmental Coo ordination and Stakeholder Mana agement 90 80 70 60 50 40 30 20 10 0 2017/18 2018/19 2019/20 81.8 78.6 76.3 12.4 13.3 14.6 8.7 8.7 9.3 7.7 7.8 8.4 Provincial and Local P Liason n Media Engagement Cluster Supervision (Human al Development, Socia Protection and Governance) Cluster Supervision (Economic and Infrastructure, Justice and International) 2.1 3 3.2 Programme Management for Intergovernmental Coordination and Stakeholder Management The amount of R78, 6 6 million was allocated for the function of p provincial and Local Liaison for the 2018/19 financial year.
4.1.3 Expenditure A Analysis The National Develop pment Plan emphasises the need to unite a all South Africans around a co ommon goal, ensure citizens are active in t heir own development, and bui ild a capable and developmental state.

Thi s goal is expressed in outcome e 12 (an efficient, effective and development t-oriented public service) and ou utcome 14 (a diverse, socially cohesive socie ety with a common national id dentity) of government’s 2014-2019 med ium-term strategic framework.
To support the realisation of these outco omes, the ANNOUNCEMENTS, TABLING GS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 93 Government Communication and Information System will continue to focus on providing strategic communications, and facilitating active citizen participation over the medium term.
The bulk of these activities, which include conducting research on government communication strategies and compiling communications products, such as the Vuk’uzenzele newspaper, are to be performed by the department’s personnel.

The department will spend 58.9 per cent of its total budget on compensation of employees towards 418 funded posts and projects over the medium term.
4.1.3.1 Providing strategic communications The department provides information about government policies, plans, programmes and activities to the public.

Over the medium term, the department plans to conduct 10 458 outreach programmes and publish 111 editions of communication products.

This includes the production and distribution of 18.7 million copies of the Vuk’uzenzele newspaper in 11 official languages and 9 600 Braille copies each year over the medium term.
Information published in Vuk’uzenzele focuses on key government priorities, such as issues affecting the youth, service delivery, rural development, and includes advertisements for government vacancies.

The production and distribution of Vuk’uzenzele is funded in the Products and Platforms subprogramme, with a budget allocation of R80.9 million over the medium term.
The department aims to collect public opinion, research and analysis, and media coverage to understand the communications environment and to inform government messages.

In 2015/16, the department produced 83 research advisory reports for various national departments and premiers’ offices.

These reports provide information that helps government communicators to develop communication strategies.

In addition, 30 cluster reports will be produced over the medium term.
The Department also plans to hold 14 strategic engagements with government communicators every year, to improve the coherence and alignment of government messages.

These include four engagements with national government department heads of communication and 10 internal ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 94 [Wednesday, 9 May 2018 communicator forums to share best practices and content on government programmes.
An amount of R287.1 million is allocated to compensation of employees in the Intergovernmental Coordination and Stakeholder Management programme over the medium term for this work, and R69 million is allocated for operational expenditure.
In addition, the department will provide media bulk-buying services, which are designed to reduce the cost to government on advertising; facilitate a rapid response mechanism to hasten government’s response to issues arising in the media; and provide media production services to support other government departments.

Over the medium term, the department expects to handle 1 820 requests each year for media production services, such as photographic, video and graphic design services.
It aims to provide more than 2 000 communication services.

These include advertisements, hosting of talk shows, compilation of voice- overs, and video and photographic services to client departments and public entities.

These activities are budgeted for in the Content Processing and Dissemination programme, which has a total budget allocation of R449.5 million over the medium term.
4.1.3.2 Facilitating active citizen participation The department plans to conduct 1 200 communication development projects and 1 800 community and stakeholder liaison visits per year.

These initiatives will deliver information to more than 1 million people per month through community radio talk shows, community newspapers, and awareness campaigns at taxi ranks Vote 3: Communications 23 and malls.
An amount of R5.8 million is allocated mainly for communication development projects, R3.5 million for community and stakeholder liaison visits, and R2.1 million for Thusong service centres each year through the Provincial and Local Liaison subprogramme.
The department expects to spend a further R1.6 million per year over the medium term in this subprogramme on the imbizos, which facilitates interactions between political principals and the public, and develops content for print and electronic communication products.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 4.2 ICASA 95 The Independent Communications Authority of South Africa was established by the Independent Communications Authority of South Africa Act (2000) to regulate the South African communications, broadcasting and postal services sectors.
The regulator’s mandate is defined in the Electronic Communications Act (2005) as licensing and regulating electronic communications and broadcasting services, and in the Postal Services Act (1998) as regulating the postal services sector.

Enabling legislation also empowers the regulator to monitor licensee compliance with licence terms and conditions, develop regulations for the three sectors, plan and manage the radio frequency spectrum, and protect consumers in relation to these services.
4.2.1 Expenditure trends Over the medium term, the Independent Communications Authority of South Africa will continue to focus on increasing access to meet the high demand for wireless broadband services; protecting consumers against harmful practices employed by operators in the use of premium rated services; increasing competition in the broadcasting sector; and developing a regulatory framework for dynamic spectrum management.
The authority contributes to outcome 14 (a diverse, socially cohesive society with a common national identity) of government’s 2014-2019 medium-term strategic framework, and indirectly to outcome 6 (an efficient, competitive and responsive economic infrastructure network) and outcome 12 (an efficient, effective and development-oriented public service).

The authority seeks to increase access to high-demand spectrum from the current 566.69MHz to 958MHz in 2019/20.
Access to this spectrum will enable the rollout of wireless broadband infrastructure by licensees.

In 2017/18, the authority will make an additional 240MHz of broadband spectrum available to licensees for the provision of broadband services.

The authority seeks to protect consumers from harmful practices employed by the operators in the use of premium-rated information and entertainment services.

This will be achieved by finalising regulations on premium-rated services in 2017/18.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 96 [Wednesday, 9 May 2018 The authority, in a bid to increase competition in the telecommunications sector, plans to review the number of portability regulations available over the medium term, which allow cell phone number porting for all telecommunication service users.

These activities are funded through the policy research and analysis programme, which has an allocation of R53.5 million over the medium term.
The authority also plans to license an additional radio broadcaster in Northern Cape in 2017/18 and establish offices in North West and Northern Cape to expand its national footprint and increase competition in the commercial broadcasting sector, at a cost of R801.2 million over the medium term.

Priority will also be given to finalising plans for relocation of the authority head office when the current lease expires in October 2017.
As these processes are administered and managed by the authority’s personnel, compensation of employees is expected to be the main driver of expenditure, accounting for an estimated 58.8 per cent of the total budget.

These activities are funded through the licensing programme, which is allocated R162.3 million over the medium term.

The authority aims to increase the range of mobile network coverage by 15 per cent and to extend network measurements to include data, and not just voice calls.
This will contribute to improving the quality of communications in South Africa and facilitate effective competition in the ICT sector by the end of 2019/20.
The authority will receive inputs from the 5G Forum global network for making contributions to the International Telecommunications Union by the end of 2019/20 and update the national radio frequency plan and the radio frequency migration strategy through the engineering and technology programme, which has an allocation of R51.8 million over the medium term.

In 2016, the authority issued service licences to monitor the equitable coverage of political parties during the local government elections.
Over the medium term, the authority will develop several regulatory frameworks aimed at regulating dynamic and opportunistic spectrum management, V- band and E-band spectrums, and exemptions for resellers of electronic communications network services.

These activities will be funded through the compliance and consumer affairs programme, which has an allocation of R83.3 million over the medium term.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 97 The authority intends to manage the cost of living adjustments for spending on compensation of employees and to keep it below 10 per cent over the medium term, to bring salaries in line with other entities within the department and the ICT sector at large.
As a result, expenditure on compensation of employees is set to increase at an average annual rate of 4 per cent from R257.3 million in 2017/18 to R287.8 million in 2019/20.

The authority’s main source of funding is through transfers of R1.4 billion over the medium term from the Department of Communications.

Revenue is expected to increase from R441.4 million in 2017/18 to R493.1 million in 2019/20.
4.3 SABC The South African Broadcasting Corporation is listed as a schedule 2 public entity in terms of the Public Finance Management Act (1999).

Its mandate is set out in its charter and in the Broadcasting Act (1999) and requires it to provide radio and television broadcasting services to South Africa.
4.3.1 Expenditure Trends The South African Broadcasting Corporation’s spending focus over the medium term will be on improving the quality, diversity and accessibility of content; supporting digital migration; and retaining sports broadcasting rights for production.
The work of the corporation contributes to outcome 12 (an efficient, effective and development-oriented public service) and outcome 14 (a diverse, socially cohesive society with a common national identity) of government’s 2014-2019 medium-term strategic framework.

The corporation will continue to produce news and current affairs content that is editorially independent, credible, relevant and informative.
The corporation will fund this activity from transfers from the department of R560 million over the medium term.

The corporation projects to spend R174 million on Channel Africa’s operations and broadcasts in Southern Africa, East Africa and West Africa in English, French, Chinyanja, Portuguese, Silozi and Swahili, and R345 million over the same period to produce educational programmes on all channels.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 98 [Wednesday, 9 May 2018 Digital migration is a way of increasing the volume and quality of content.

The corporation will source new content from new producers and producers who operate outside of major urban areas.

Expenditure is projected to increase at an average annual rate of 5.4 per cent over the medium term, from R9.9 billion to R11.5 billion.
This is mainly driven by spending on compensation of employees increasing at an average rate of 7.8 per cent or R701.1 million, to improve capacity in the technology departments; and spending on goods and services increasing at an average rate of 8.5 per cent or R1.5 million, for broadcasting sports of national interest, digital terrestrial migration and technology upgrades.
The corporation expects to make its content freely accessible on the internet, as part of the preparations for digital migration, with the goal of maintaining audience share for all five television channels at 50 per cent.

The corporation also aims to maintain its radio audience share at 70 per cent over the medium term.

The corporation is planning to implement strategies that lay the groundwork for the launch of new channels on digital terrestrial television.
Implementing the strategies is expected to increase capital expenditure from R321 million in 2015/16 to R958 million in 2018/19.

Replacing and upgrading studios to become compatible, ahead of the launch of digital terrestrial television, is expected to increase spending on television outside broadcasting to R155 million, Henley Broadcasting Studios to R387 million, radio broadcast facilities to R174 million, and information technology to R243 million.
Spending on sports broadcasting rights is projected at R1.7 billion over the medium term to focus on ensuring the development and maintenance of an innovative, sustainable content portfolio; entrance into long term rights contracts with federations; and maximisation of revenue.

Developing, maintaining and prioritising relationships with sporting federations are essential to building sustainability in content delivery.
In addition, the corporation has committed to developing an appealing cross platform brand ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 99 strategy over the medium term to enhance the brand, increase revenue and generate new audiences for sporting events.
The corporation expects to generate 96 per cent of its revenue over the medium term from license fees, commercial revenue from advertising, programme and sports sponsorships across television, radio and online platforms; 1.8 per cent from transfers from the department; and 2.2 per cent from other sources, such as interest, dividends and rent on land.

Revenue is expected to grow steadily from R9.3 billion in 2016/17 to R11.4 billion in 2019/20.
4.4 MDDA The MDDA was set up in terms of the Media Development and Diversity Agency Act (2002) to enable historically disadvantaged communities and individuals to gain access to the media.
The mandate of the agency is to: create an enabling environment for media development and diversity which reflects the needs and aspirations of all South Africans; redress the exclusion and marginalisation of disadvantaged communities and people from access to the media and the media industry; and promote media development and diversity by providing support primarily to community and small commercial media projects.
The overall objective of the Agency is to ensure that all citizens can access information in a language of their choice, and to transform media access, ownership and control patterns in South Africa.

4.4.1 Expenditure trends The NDP informs MTSF priorities.

The latter is government’s three- year implementation phase of the NDP and is structured around 14 priority outcomes.
Outcome 6 (an efficient, competitive and responsive economic infrastructure network), Outcome 12 (an efficient, responsive and development-oriented public service) and outcome 14 (a diverse, socially cohesive society with a common national identity) speak to MDDA’s approach to developing a robust and sustainable community media sector I pursuance of its mandate.
Over the medium term, MDDA’s service delivery priority will be on encouraging media diversity in a rapidly changing telecommunications environment.

Its core activities will continue to be financial and non- financial support of community broadcast and community and small commercial print projects.
This will cover grant funding to strengthen existing projects and enhance their sustainability, and to fund new ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 100 [Wednesday, 9 May 2018 projects, with an emphasis on the promotion of indigenous languages and making a contribution to community development and the alleviation of poverty and inequality.

Financial support through grant funding initiatives will be R133 millio9n over the medium term.
The MDDA is actively trying to build relationships with key stakeholders to enable it to increase the financial resources available to the community media sector.

The positive impact will add to the funds set aside over the MTEF for community media.

MDDA aims to support around 120 projects over the medium term.
The MDDA will focus its capacity building initiatives on supporting content generation by community media, as well as addressing other urgent needs of the sector, such as governance training, in a effort to further ensure its sustainability.

Over the medium term, some 120 projects will be capacitated to assist in closing the skills gap in these various areas.
Community broadcast grants account for 47 % of MDDA’s total budget over the medium term, while overall spending on print and digital and community broadcast projects is expected to decrease by an average of 5.4 % over the medium term as a result of no funding from print media.

Total funding to the MDDA by the Department is expected to be R99 million over the medium term.

The MDDA no longer receives funding from the print media but is engaging the sector in order to revive this revenue stream.
Broadcast funders will provide an average of R97 million over the medium term.

Continued stakeholder engagement and lobbying initiatives are being carried out to ensure the MDDA is financially empowered to achieve and make significant impact in line with its mandate.

4.5 Brand SA Brand South Africa was established as a trust in 2002 and gazetted as a schedule 3A public entity in accordance with the Public Finance Management Act (1999) in 2006.
Its purpose is to: (i) develop and implement a proactive and coordinated international marketing and communications strategy for South Africa; (ii) contribute to job creation and poverty reduction; and (iii) attract inward investment, trade and tourism.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 4.6 The FPB 101 FPB was established as a schedule 3A public entity in accordance with the PFMA.
The FPB regulated and controlled the creation, production, possession, exhibition and distribution of films, interactive computer games and certain publications in terms of the Film and Publications Act (1996).

The Board is also responsible for monitoring age restricted business premises for compliance with their licence and registration terms.

4.6.1 Expenditure trends The FPB’s main source of revenue is a transfer from the Department.
Other revenue sources include fees for classifying films and publications, registrations fees for new distributors, and annual renewal of distribution licences.

The spending focus over the medium term will be on expanding activities aimed at preventing child pornography on the internet.
These activities include: working closely with international organisations; researching human trafficking trends classifying films and ensuring that internet users, especially children, are warned of sites containing sensitive pornographic material; monitoring distributors and traders for compliance; and establishing working relationships with international organisations such as the International Association of Internet Hotlines.

5.
Committee observations 5.1 The Department The Committee noted: (i) that the Department could not provide training to officials due to budgetary constraints; (ii) with concern that the Department only employed one per cent of persons living with disabilities; (iii) that most approved vacancies in the structure are not funded; ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 102 [Wednesday, 9 May 2018 (iv) that the Department was not able to fully implement its mandate as some of the units on the organizational structure are partially capacitated and others are not; (v) with concern that the Department was not able to meet some of the legislated commitments such as the Skills Development Act, 1998 (Act 97 of 1998), which required that one per cent of the personnel budget be allocated for employee training and development, including the implementation of an internship programme; (vi) the Department would also coordinate public awareness and registration campaigns in the provinces and target non- subsidized households that rely on retail market to acquire migration devices (STBs and integrated TV sets as well as commercial satellite decoders); and (vii) with concern that the Director-General post has been that of revolving acting persons since inception of the Department.
The Committee further noted and commended the Department, that despite the challenges experienced, it had by and large ensured that there was better accountability over the allocated limited resources, hence the Department managed to obtain clean audits in the last two years.

Lastly, the Committee noted with great concern that only R77 million was allocated to the Department for Broadcast Digital Migration (BDM) rollout; whereas the estimated budget required is R6.6 billion.
5.2 GCIS The Committee noted: (i) with concern that GCIS does not seem to have any programme for Digital Terrestrial Television awareness campaign; (ii) that GCIS does not have strategy on fake news; (iii) that due to budgetary constraints, GCIS was unable to print hard copies of the SA Yearbook but was available online; and ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 103 (iv) the Imbizo’s strategy of the Department was not well planned as it allowed skewed rollout to provinces, for an example for the months reported, some provinces were visited eleven times while other such as Eastern Cape and Northern Cape had no Imbizo’s for the months reported.
5.3 SABC The Committee commended the Board and the Executive for its continuous engagements with staff members.

The Committee encouraged the SABC to strengthen communication between the Board and the Executive Committee.

The Committee was of the view that the SABC was moving towards the right direction, as all the current challenges were being addressed.
The Committee expressed is disappointment on the current changes at SAFM and encouraged the SABC to communicate effectively, internally and externally on decisions with an impact on the public.

The Chairperson of the Board had engaged with Mr Mohuba on the allegations that he plagiarized his doctoral thesis.

There was currently an investigation taking place and until the investigation was complete, there was nothing that the SABC could do.
The Committee further noted that: (i) the SABC was dealing with the matter of the Mjayeli security tender through the SIU and that the Court bid will await finalization of the SIU investigations; (ii) the SABC had appointed a Group Executive: Legal; (iii) internal control environment remained a huge challenge for the SABC; (iv) with great concern that SABC does not have a disaster recovery plan or structure; (v) Mr Motsoeneng and Mr Aguma payout had been frozen.
Mr Motsoeneng took the SABC to court and CCMA complaining that his removal was unlawful and that matter was still before the courts; ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 104 [Wednesday, 9 May 2018 (vi) Mr Aguma had not challenge the freezing of his pension; (vii) the review of the breakfast show was done to increase audience in order to generate more revenue in line with the footprint of the station as well as the resources allocated to the station; (viii) the SABC continues to deliver on its mandate including unfunded mandates; and (ix) staff were vetted as part of the HR policy.
5.4 FPB The Committee noted with concern the allegations against Facebook which had an impact on the personal information of South Africans.
5.5 ICASA The Committee noted: (i) the commitment by ICASA to address the issue of high cost of communication; (ii) significant decline in mail volumes at the Post Office; (iii) the improvement in the vacancy rate; (iv) that ICASA would be relocating to a new office during the year under review; (v) that the presentation did not speak on allocations for 2019 Elections; (vi) that ICASA HR Development Programme follows the normal recruitment processes, except that it was focusing on young people; (vii) that the matter of the moratorium would be finalised during the current financial year; (viii) the positive update as presented by the regulator; (ix) the minimal effort by ICASA to recruit Persons Living With Disabilities (PLWD); ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 105 (x) there is lack of coordination between the MDDA and ICASA in support of community media; (xi) that ICASA has been handling the MultiChoice debacle in accordance with its Constitutional mandate; (xii) that ICASA has also initiated processes to resolve the Sentech and community radio station’s impasse; and (xiii) the lack of structured programmes aimed at capacitating Council.
5.6 MDDA The Committee noted: (i) with concern that out of 9 vacancies, 7 were management positions; (ii) that the MDDA had no research and development capacity and yet it is a critical function for the organisation; and (iii) that the MDDA had no monitoring and evaluation plan nor any innovation directorate.

The Committee further noted that the Ministry was in consultation with Sentech and MDDA regarding the community radio stations that had been switched off and the matter would be amicably resolved.
5.7 BSA The Committee commended BSA for having 60 per cent of its vacancies filled by women.

The Committee noted the reduction on domestic and international travels.

6.
Committee Recommendations The Committee recommended to the Minister and entities reporting to her on the following: ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 106 [Wednesday, 9 May 2018 6.1 The Department The Committee recommends that the Minister should ensure: (i) that the Department should provide an updated comprehend- sive plan for DTT rollout towards the international switch- off deadline (for analogue signal) of June 2019; and that the Minister should present a progress implementation report.
(ii) that the Department should provide a comprehensive report on its engagement with Sentech in relation to the switching off of signal for community radio stations as a result of non- payment for signal distribution; (iii) the Entity Oversight is capacitated in order for it to execute its mandate of overseeing the entities; and (iv) that while coordinating public awareness and registration campaigns in the provinces, the Department should also include a plan of action to integrate Members of Parliament and their constituencies into the campaign.
6.2 GCIS The Committee recommends that the Minister should ensure: (i) that GCIS submit a comprehensive report on media houses used for advertising; (ii) that GCIS strengthen its strategy on dealing with fake news and endeavor to develop; a comprehensive plan to counter and or fake news websites; and (iii) that GCIS provide a breakdown of government adspend for community media.
6.3 SABC The Committee recommends that the Minister should ensure: (i) that the SABC table a complete proposal on the ability to attract advertisers and to look at an alternative way of funding; ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 107 (ii) that the SABC provide a detailed breakdown of projections for unfunded mandates such as State funerals; (iii) that SABC management not abdicate its duties of engaging with staff by relegating all staff matters to the unions forums; (iv) that the SABC prioritise coverage of rural areas and report back to the Committee on all areas that do not receive the broadcast signal of the public broadcaster; (v) that the SABC must report back to the Committee on the matter relating to the Board member Mr Mohuba; (vi) that the SABC develops a contingency proposal which it shall table before the Committee on how to cater for unfunded mandates; and (vii) that the Board continues with the momentum of good work carried over by the Interim Board to resolve the challenges of the SABC by among others ensuring clear communication to staff and the public in general.
6.4 FPB The Committee recommends that the Minister should ensure: (i) that FPB investigates allegations against Facebook which had an impact on the personal information of South Africans.

; and (ii) that management not abdicate its duties of engaging with staff by relegating all staff matters to the unions forums.

The Committee committed to deal with other matters relating to FPB during the planned oversight visit in May 2018 and a report thereof will be tabled to the National Assembly.
6.5 ICASA The Committee recommends that the Minister should ensure that: (i) ICASA appears before the Committee to report on their preparations for 2019 Elections including issues of regulations relating to political parties’ airtime; ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 108 [Wednesday, 9 May 2018 (ii) ICASA provides a comprehensive report on the rationale for issuing licences to community media projects located within the same area; (iii) ICASA provides a comprehensive report on its quarterly provincial engagements with relevant stakeholders; and (iv) ICASA management does not abdicate its duties of engaging with staff by relegating all staff matters to the unions forums.
6.6 MDDA The Committee recommends that the Minister should ensure that: (i) MDDA establishes and provides a report on shared services strategy; (ii) ensure that the Department and MDDA submit an audited report on the support provided to community media by relevant local municipalities; and (iii) MDDA management does not abdicate its duties of engaging with staff by relegating all staff matters to the unions forums.
6.7 BSA The Committee recommends that the Minister should ensure: (i) that BSA presents a comprehensive report on its existence abroad and how it plans to leverage from the embassies; and (ii) that BSA seek to create more linkages between their programmes and the DTT programme.

Furthermore, the Committee recommends to the Minister that she should ensure that all critical funded positions are filled in the Department and across entities.
The Committee will continue engaging counterpart Committees in order to find an amicable solution to the budgetary challenges of the Department, beginning with consultations with the Parliament Budget office (PBO) Director, Prof Mohammed Jahed.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 109 The Committee conducted an oversight visit to the MDDA and FPB in May 2018 relating to the entity’s governance challenges and would table a report to the National Assembly before 30 June 2018.

Lastly, the Committee recommends that the Minister should provide all the reports contained in the recommendations to the Department and entities on or before 30 September 2018.

Report to be considered.

4.
Report of the Portfolio Committee on Women in the Presidency on Annual Performance Plan (Budget Vote 13) of the Department of Women in the Presidency and the Commission for Gender Equality (CGE) for financial year 2018/19, dated 8 May 2018 The Portfolio Committee on Women in the Presidency, having considered the Annual Performance Plan and Budget of the Department of Women in the Presidency for 2018/19 as well as the Commission for Gender Equality’s Annual Performance Plan for 2018/19 on the 24 April and 2 May 2018 respectively, reports as follows: 1.
Introduction The Department of Women in the Presidency (hereafter ‘the Department’) was established in 2014 following the national elections.

In 2015, the Department received its first standalone budget allocation, Vote 13.

In the 5th Parliament, oversight over the Department was assigned to the Portfolio Committee on Women in the Presidency.
To this end, the Committee in performing its constitutional mandate engaged with the Commission for Gender Equality (CGE)’s the Annual Performance Plan (APP) and budget for 2018/19 on 24 April 2018 and on the Department of Women in the Presidency on 2 May 2018.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 110 [Wednesday, 9 May 2018 The Committee was also briefed by the Auditor General of South Africa A(GSA) on its review of the Department’s 2018/19 APP on 24 April 2018.
Having considered the APP’s of the Department and the CGE as well as the input received by the AGSA, the Committee also took cognisance of the recommendations outlined in the 2017 Budget Review and Recommendations Report (BRRR) and the in-year monitoring reports of the Department for the 1st and 2nd quarter of 2017/18.

22ANDATE AND PURPOSE OF THE DEPARTMENT 2.


Mandate and Purpose of the Department The purpose of the Department of Women (henceforth “the Department”) is to lead, coordinate and oversee the transformation agenda on women’s socioeconomic empowerment, rights and equality.

It derives its mandate from the Constitution and the presidential proclamation following the 2014 national elections.
The mandate of the Department is to champion gender equality and the achievement of women’s socioeconomic empowerment and rights.

3.

Overview of the 2017/18 financial year The 2017 Estimates of National Expenditure indicates that the Department received a budgetary allocation of R206.2 million for the 2017/18 financial year.

Of this, R78.3 million constitutes the transfer payment to the Commission for Gender Equality, leaving the Department with an operating budget of R 127.8 million.
This was an R800 000 increase in the Department’s operating budget as compared to the previous financial year.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 111 Figure 1: Budget appropriation for 2017/18 The Department has to date only presented its first and second quarter reports for 2017/18 to the Portfolio Committee on Women.
Additional expenditure information has been sourced from National Treasury’s consolidated 3rd quarter expenditure report on the National Budget for 2017/18.

Performance information is only available for the period ending September 2017 and has not been included in this overview.

It is however worth noting that in quarter 2, out of the 27 targets planned, 11 (41%) targets were achieved, while 16 (59%) were not achieved.
The performance for quarter 2 was similar to that in the first quarter despite having five less targets in quarter 2.

The expenditure report indicates under Vote 13 that the Department for Women has spent R150.2 million or 72.8 per cent of its available budget of R206.2 million.

The R150.2 million actual spending represents 98.3 per cent of the R152.8 million projected expenditure for this period.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 112 [Wednesday, 9 May 2018 The table below reflects the Department’s spending per programme as at 31 December 2017 as contained in National Treasury’s consolidated 3rd quarter expenditure report.
Table 1: Programme Expenditure as at 31 December 2017 Programme 1 Programme 2 Programme 3 Total Total adjusted allocation R 84.6.3m R99.8m R21.6 m R206.1 million Projected Expenditure by 31 Dec 2017 R 63.0m R69.0m R20.7m R152.7million Actual Expenditure R60.0m R20.8m R150.1 million R69.3m (R59.8m = transfer payment to CGE) Percentage Expenditure 70.9% 69.4% 96.1% 72.8% ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 113 Reasons for The R3million The Department Overspending Overall, the variance underspending overspent by of R111 000 is department has was mainly on R300 000 – this recorded.
The underspent by goods and is attributed to a variance is R2 million for service as a result misallocation of mainly due to the the period under of unpaid office expenditure processing of late review.

accommodation relating to invoices related costs due to the payment of to expenditure on non- issuance of outstanding leave the 60th invoices by the days to officials Anniversary of Department of who exit the the Women’s Public Works.

public sector month celebrated through in 2016/17.


The resignations and payment was contract delayed due to a termination.

continuous rejection of the department’s banking details in the verification process.

The higher than projected spending was also as a result of the procurement of Sanitary Dignity Packs, the cost of which was absorbed by the budget of the department.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 114 [Wednesday, 9 May 2018 4.
Policy priorities for 2018/191 In its 2018/19 Annual Performance Plan, the Department indicates that the overarching outcome that it aims to attain is the achievement of an informed society that upholds non- sexism, fights patriarchal practices and understands gender equality and implements gender- sensitive policies.

The Department has prioritised the following strategic objectives from its 2015-2020 Strategic Plan: a.
Promotion of strategic leadership; good governance; and the effective, efficient and economical use of public resources for the socio-economic empowerment of women and the promotion of gender equality; b.
Promotion of gender mainstreaming of socio-economic and governance programmes such that they accelerate a just and equitable society for women; c. Promotion of gender knowledge and analysis of policy and policy implementation for the socio-economic empowerment of women; d. Promotion of monitoring, evaluation and reporting systems as a mechanism for ensuring timely interventions aimed at the socio- economic empowerment of women and gender equality; and e. Promotion of public participation in the work of the Department through outreach and advocacy work.
In support of these strategic objectives, the Department indicates in the 2018 Estimates of National Expenditure that its focus over the medium- term will be directed at three core areas namely: • Analysing, evaluating and monitoring policy and programme implementation • Mainstreaming women’s socioeconomic empowerment • Raising awareness and public participation 1 Department of Women in the Presidency (2018) Annual Performance Plan 2018/19 ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 115 Another noticeable area of focus is the Department’s “resuscitation” of matters related to gender-based violence.
It notes that it is in the process of establishing an inclusive high-level Committee on Gender-Based Violence.

Through this committee and engagements with relevant stakeholders, it intends to address the root causes of violence which inhibits the advancement, empowerment and equality of women and girls.

This is a significant change from the Department’s inception in 2014 when issues related to gender-based violence were seemingly transferred to the Department of Social Development.
The Department also indicates that it will be working towards the revival of the National Gender Machinery, recognising it as a mechanism to advance and promote women’s protection and empowerment.

5.

Organisational Environment The organisational design of the Department is structured into 3 Divisions reporting directly to the Accounting Officer namely; • Management, • Financial Management; • Corporate Management.
2 Branches reporting directly to the Accounting Officer – • Social Transformation and Economic Empowerment; • Policy Stakeholder Coordination and Knowledge Management.

The budget programme structure for the 2018/19 financial year reports on three programmes: 1.

Administration; 2.

Social Transformation and Economic Empowerment; and 3.
Policy, Stakeholder Coordination and Knowledge Management ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 116 [Wednesday, 9 May 2018 Policy, Stakeholder Coordination and Knowledge Management was reviewed and the following sub programmes created and renamed: 5.1 Research and Policy Analysis and Information and Knowledge Management sub-programmes have been merged to form a news sub- programme: Research, Policy Analysis and Knowledge Management.
5.2 Sub-Programme: Sub-programme: International Relations A new sub-programme International Relations has been created.

The purpose of the sub-programme is to promote international relations and engagements on women, as well as ensure South Africa’s compliance with international treaties on women.

6.

Analysis of the 2018/19 budget2 The 2018 Estimates of National Expenditure indicates that the Department receives a budgetary allocation of R230.2 million for the 2018/19 financial year.
Of this, R80.7 million constitutes the transfer payment to the Commission for Gender Equality, leaving the Department with an operating budget of R 149.5 million.

This is an increase of R21.7 million in the Department’s operating budget as compared to the previous financial year.
Table 2: Appropriated budget 2018/19 (including the CGE transfer) Programme Budget Nominal Rand change Real Rand change Nominal % change Real % change R million 2017/18 2018/19 2019/20 2020/21 2017/18-2018/19 2017/18-2018/19 Programme 1: Administration Programme 2: Social Transformatio n and Economic Empowerment 83.8 78.7 83.9 90.9 - 5.1 - 9.2 -6.09% -10.98% 93.4 106.7 113.1 120.6 13.3 7.7 14.24 % 8.28% 2 Levendale, C (2018) Budget 2018/19 – Vote 13: Department of Women, Research Unit, Parliament of the Republic of South Africa, 1 May 2018.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 117 Programme 3: Policy, Stakeholder Coordinator and Knowledge Management 28.1 44.9 47.4 48.2 16.8 14,5 59.79% 51.46% TOTAL R205.3 R230.3 R244.4 R259.7 R25.0 R13.0 12.18% 6.33% Table 2 indicates that despite a nominal increase of R25 million in the allocation between 2017/18 and 2018/19, when inflation is taken into account, the Department has R13 million more to spend than it did in the previous financial year.
Figure 2: Budget allocation 2018/19 (including CGE transfer payment) Budget Allocation 2018/19 (Including CGE transfer) 120,0 100,0 80,0 60,0 40,0 20,0 0,0 Programme 1: Administration Programme 2:Social Transformation & Economic Empowerment Programme 3: Policy, Stakeholder, Coordination & Knowledge Management 2017/18 2018/19 Figure 2 above provides a diagrammatic representation of the allocated funds.
From this representation, it is clear that there has been a year-on-year decrease in the Administration Programme (less R5.1 million), while there have been increases in Programme 2: Social Transformation and Economic Empowerment (increase of R13.3 million) and Programme 3: Policy, Stakeholder Coordination and Knowledge Management (increase of R16.8 million).

It must be noted that the increase in Programme 2 is inclusive of the Commission for Gender Equality’s transfer payment.
Programme 3 sees a significant increase for the 2018/19 financial year.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 118 [Wednesday, 9 May 2018 When looking at key cost drivers, 57.1% (R85.4 million) of the Department’s operating budget (R149.5 million) is allocated for compensation of employees and 40.7% (R60.9 million) is allocated for goods and services.
In terms of spending under goods and services, the main cost drivers are travel and subsistence (R19.2 million), property payments (R16.7 million), spending on venues and facilities (R4.9 million) and expenditure for external audit costs (R3.6 million).
Table 3: Comparison of Key Cost Drivers between 2017/18 and 2018/19 Key Cost Driver Compensation of employees Goods and services - - - - Travel & Subsistence Property payments Venues & facilities External Audit Costs 2018/19 R85.4 million R60.9 million - - - - R19.2 million R18.4 million R4.9 million R3.6 million 2017/18 R71.7 million R52.1 million - - - - R15.0 million R16.7 million R1.4 million R3.5 million Looking at key cost drivers comparatively across the 2017/18 and 2018/19 financial years they remain similar, however compensation of employees sees a R13.8 million increase year-on-year and goods and services receives an increased allocation of R8.8 million.
Allocations to travel and subsistence, property payments, venues and facilities and external audit fees amount to approximately R44.6 million or 73.3% of the goods and services budget.
Table 4: Appropriated budget 2018/19 (excluding the CGE transfer) Budget 2017/18 2018/19 2019/20 2020/21 Real Rand change Nominal Rand change 2017/18-2018/19 83.8 78.7 83.9 90.9 - 5.1 - 9.2 21.5 26.0 27.9 30.7 4.5 3.1 Programme R million Programme 1: Administration Programme 2:Social Transformation & Economic Empowerment Programme 3: Policy, Stakeholder, Coordination & Knowledge Management TOTAL 28.1 133.4 44.9 149.6 47.4 159.2 48.2 169.8 16.8 16.2 14.5 8.4 ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 119 Figure 3: Budget Allocation 2018/19 (excluding CGE transfer) Budget Allocation 2018/19 (excluding CGE transfer) 90,0 80,0 70,0 60,0 50,0 40,0 30,0 20,0 10,0 0,0 Programme 1: Administration Programme 2:Social Transformation Programme 3: Policy, Stakeholder, & Economic Empowerment Management Coordination & Knowledge 2017/18 2018/19 When removing the CGE transfer payment from the allocation, the real rand change in the Department’s budget is R8.4 million.
Programme 2 in fact only has a R4.5 million increase when the CGE transfer allocation is removed from the programme budget.

As indicated earlier, Programme 3 sees the most significant increase year on year.

In terms of human resources, the 2018 Estimates of National Expenditure indicates that the Department has a staff complement of 121 persons for the 2018/19 financial year.

This is 12 more than in the 2017/18 financial year.
The greatest proportion of personnel is in the Administration programme, which has 70 staff members or 57.8% of the overall staff complement, amounting to R47.3 million of the budget for compensation of employees.

Programme 2 will have 20 employees and Programme 3, a total of 31 employees.
In terms of expenditure on compensation of employees, the greatest proportion of staff (36) fall within the level 13-16 salary band (senior management), at a combined cost of R41.4 million or a unit cost of R1.1 million per person.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 120 [Wednesday, 9 May 2018 6.1 Programme 1: Administration The purpose of the Administration programme is to provide effective leadership, management and support services to the Department.
The total allocation for this programme is R78.6 million.

This allocation is approximately R6 million less than in the 2017/18 financial year; however, it still consumes the highest proportion of the Department budget.

This remains a concern as the Department’s core mandate is carried out in the other two programmes.
Expenditure under Programme 1 is allocated to: Table 5: Sub-programme allocations 2018/19 Sub-Programme Ministry Departmental Management Corporate Services Financial Management Office Accommodation TOTAL 2017/182 R19.3 R17.3 R19.9 R13.0 R14.9 R84.6 million 2018/19 R16.1 R10.9 R22.2 R12.6 R16.7 R78.6 million Sub-programme objectives are: • Strengthened good governance that ensure the Department delivers on its mandate Improved strategic financial management system in Department, enabling delivery on the mandate Effective and appropriate Human and Information Communication and Technology (ICT) and Physical Resource management, enabling delivery on its mandate Approximately 60% of the budget allocation for the programme is spent on compensation of employees.
The ENE indicates that for the 2018/19 financial year, the programme will have 70 staff members.

Fifteen targets have been planned for programme 1 for 2018/19.
These are listed in tabular form below: ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 121 Table 6: Programme 1: Key Performance indicators and targets for 2018/19 Sub- programme Key Performance Indicator Risk Management register and annual risk plan Number of quarterly risk mitigation progress report Reporting Period Annual Quarterly Annual target Conduct annual risk assessments and produce annual risk plan 4 quarterly risk mitigation progress reports against the target in the risk plan produced Produce strategic plan 2015-2020 and APP 2019/20 and submit to National Treasury and DPME 4 quarterly performance review reports submitted to DPME 4 quarterly MPAT compliance reports produced 1 rolling 3-year strategic internal audit plan for 2018/2020 and the annual internal plan for 2018/19 approved by the Audit and Risk Committee 5 internal audit reports against the annual internal audit coverage plan produced 4 quarterly reports on gender communications and information made available on DoW media platforms Approved strategic and annual performance plans Quarterly Number of quarterly performance review reports produced Number of quarterly MPAT compliance reports produced Rolling 3-year strategic internal audit and annual internal audit plans Number of internal audit progress reports against the annual internal audit coverage plan produced Number of quarterly reports on gender communications and information made available on DoW media platforms Quarterly Quarterly Quarterly Quarterly
 Quarterly % of invoices paid within 30 days % expenditure in relation to budget allocation % of external audit recommendations implemented Quarterly Quarterly Maintain less than 2% underspending 100% of all valid invoices within 30 days Quarterly 95% of external audit recommendations implemented % vacancy rate Quarterly Maintain a vacancy rate of less than 10% % of disciplinary cases finalised internally within 90 days of initiation % of achievement of ICT systems availability Number of progress reports on implementation of DoW Business Systems Implementation Plan Quarterly Quarterly Quarterly annually 100% of all disciplinary cases resolved within 90 days of initiation 95% availability of ICT system achieved and annual progress report produced 4 progress reports on implementation of the Business Systems Year Implementation Plan 1 of ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 122 [Wednesday, 9 May 2018 6.2 Programme 2: Social Transformation and Economic Empowerment The purpose of the programme is to facilitate and promote the attainment of women’s socioeconomic empowerment and gender equality.
The programme objective is to promote gender mainstreaming and governance programmes such that they accelerate a just and equitable society for women.
The programme consists of the following sub-programmes: is the Empowerment for mainstreaming the sub-programme Social Transformation and overall the to provides leadership and management Sub-Programme Management: Economic strategic programme Social Empowerment and Transformation: the to provide purpose of intervention mechanisms on policies and programme implementation social empowerment and participation of women towards social transformation.
Governance and Transformation, Security provides guidance for enhancing existing systems and procedures and addresses gaps that create barriers to the equal participation of women in the private and public sectors.

This sub-programme also contributes to the elimination of gender-based violence.
Economic Empowerment and Participation: the purpose of to provide intervention mechanisms on policies and programme implementation for mainstreaming the economic empowerment and participation of women towards economic transformation and development.
the sub-programme Justice is 2017/18 R6.2 2018/19 R6.5 R5.9 R7.2 R5.6 R6.2 R3.6 R5.8 TOTAL R21.3 million R25.7 million ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] Sub-programme Objectives: 123 Intervention mechanisms on policies and programme implementation for mainstreaming the economic empowerment and participation of women towards economic transformation and development.
Intervention mechanisms for gender mainstreaming for women’s social empowerment and participation developed.

 Mechanisms for engendered transformation through advancing measures for the empowerment of women towards a just society developed.

Although the total programme allocation as per the ENE is R106.6 million, it must be remembered that R80.7 million constitutes the transfer payment to the CGE, leaving the programme with an operating budget of approximately R26 million.
Of this, R14.9 (57%) is for compensation of employees and R10.6 million will go towards goods and services.

The main cost driver under goods and services is travel and subsistence, which is allocated R5.2 million.

The ENE indicates that for the 2018/19 period, the programme will have a staff complement of 20.

This is 8 more than in 2017/18.
Table 7: Programme 2: Key Performance indicators and targets for 2018/19 Sub- programme Key Performance Indicator Reporting Period Annual target Revised draft sanitary dignity framework Report on implementation of Presidential Directive on women’s economic empowerment in the nine point plan produced Women’s financial inclusion framework Gender responsive planning and budgeting framework Quarterly Revised draft framework for sanitary dignity and implementation plan for piloting sanitary dignity framework to indigent girls and women Quarterly Gender analysis report on the Incentives Schemes Administered by the DTI produced Quarterly Framework on women’s financial inclusion developed Quarterly Gender responsive planning and budgeting framework developed ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 124 , & e c i t s u J Number of programmes in 365 days Programme of Action coordinated National Gender Machinery Revised IMC-IPOA3 for addressing violence against women and children developed [Wednesday, 9 May 2018 Quarterly 3 programmes on 365 days POA coordinated Quarterly Diagnostic report with recommendations on strengthening the NGM Quarterly Revised IMC-IPOA for addressing violence against women and children developed Seven targets have been set out for Programme 2.
Given that the Department’s core mandate is to champion gender equality and achieve women’s socioeconomic empowerment and rights, it is concerning that since its inception/restructuring in 2014 it has not developed and implemented the frameworks relating to women’s economic empowerment.

It indicates that the Draft Women’s Inclusion Framework and the Draft Gender-responsive Planning and Budgeting Framework will be developed by quarter 1 of 2018/19.
6.3 Programme 3: Policy, Stakeholder Coordination and Knowledge Management The purpose of programme 3 in as per the Annual Performance Plan, is to undertake research, policy analysis, knowledge management, monitoring, evaluation, outreach and stakeholder coordination for women’s socio-economic empowerment and gender equality.

The Department indicates that it has reconfigured programme 3.
The Department has merged the sub-programme on Research and Policy Analysis with the sub-programme Information and Knowledge Management to form the new Research, Policy Analysis and Knowledge Management sub- programme.

It has also created a new sub-programme named “International Relations”.

The aim of this sub-programme is to promote international relations and engagements on women, as well as ensure country compliance with relevant international treaties.
The budgetary changes related to these new and reconfigured programmes are not reflected in the Annual performance Plan or the presentation supplied by the Department, however the 2018 ENE reflects the sub-programme changes and expenditure estimates.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] Policy, Stakeholder leadership and management Sub-Programme Management: Coordination and Knowledge Management provides the overall strategic programme Research, Policy Analysis and knowledge management promotes the development of gender-sensitive research and conducts policy analysis to intervene in transformation for International Relations promotes international relations and engagements on women and ensures South Africa’s compliance with international treaties on women.
to 125 2018/19 R4.2 2017/18 R2.6 R5.4 R7.4 - R11.6 Stakeholder Coordination and Outreach conducts outreach the socio-economic empowerment of women and gender equality.

initiatives which promote R9.6 R14.2 Monitoring and Evaluation monitors and evaluates progress on the empowerment of women in line with international laws, national treaties and commitments.

regional, continental and R3.8 R7.1 TOTAL R21.6 million R44.8 million A total of 10 targets have been planned for programme 3 for 2018/19.
Table 8: Programme 3: Key Performance indicators and targets for 2018/19 Sub- programme Key Performance Indicator y c i l o P , h c r a e s e R d n a s i s y l a n A e g d e l w o n K Number of research reports on policy implementation for women’s socio-economic empowerment Number of public participation/outreach initiatives on women’s empowerment, including girls and young women Number of community mobilisation initiatives conducted on socio-economic issues affecting women Young women’s socio- economic empowerment framework Reporting Period Quarterly Annual target 1 End-of-term review report on socio-economic empowerment of women produced Quarterly 10 public participation/ outreach initiatives held Quarterly 4 community mobilisation initiatives conducted Quarterly Young women’s socio- economic empowerment framework ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 126 Number of reports on DoW engagements in multilateral forum produced Number of reports in fulfilment of international treaty obligations on women produced Number of monitoring reports on the implementation of outcome 14 produced Number of evaluation reports on the socio-economic empowerment of women and promotion of gender equality produced Number of monitoring and evaluation frameworks for the sanitary dignity programme developed Number of country gender indicator frameworks developed.
[Wednesday, 9 May 2018 Quarterly Quarterly 2 reports (CSW identified as one – which other report?)

2 reports Annually 1 monitoring report Annually 1 evaluation report Annually 1 M&E framework developed Annually 1 country gender indicator framework developed The programme has a total allocation of R44.8 million, of which R23.2 million (51.8%) is allocated for compensation of employees and R20.8 million (46.4%) is allocated for goods and services.
Of the goods and services budget, R12.6 million (60.8%) is allocated for travel and subsistence.

The ENE indicates that for the 2017/18 period, the programme will have a staff complement of 31.

This is an increase in staff from the previous financial year.

7.
7.

Commission for Gender Equality (CGE) 7.1 Background The background and context of CGE’s work emanates from Section 181 of the Constitution (1996) and it is one of the Chapter 9 institutions which are independent entities for strengthening democracy.

The CGE is therefore required to report to the National Assembly at least once a year regarding the progress of carrying out its strategic objectives.
Section 187 of the Constitution stipulates that the Commission should promote respect for gender equality, and protect and develop its attainment, as well as monitor, educate, lobby, advise and report on issues related to gender equality.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 127 7.2 Powers Assigned to the CGE In line with the CGE’s obligation to strengthen constitutional democracy with a focus on the attainment of gender equality, the CGE has a legislative mandate and functions which include the following: a) Monitor, evaluate and make recommendations on: • Policies and practices of organs of state, statutory bodies and functionaries, public bodies or private businesses, to promote gender equality.
• Any existing law including indigenous law and practices • Government’s compliance with international conventions with respect to gender equality.

b) Propose/recommend on: • New law that may impact on gender equality or the status of women.

c) Develop, conduct or manage • Educational strategies and programmes that foster understanding about gender equality and the role of the CGE.
d) Investigate and resolve conflicts • On gender matters and complaints through mediation, conciliation and negotiation or referral to other institutions.

e) Liaise and interact • With institutions, bodies or authorities with similar objectives to the Commission.

• With any organisation which actively promotes gender equality and other sectors of civil society to further the objectives of the Commission.

f) Prepare and submit reports • To Parliament on aspects relating to gender equality.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 128 [Wednesday, 9 May 2018 In addition, the Commission for Gender Equality may: • Conduct or order research to be conducted; • Consider recommendations, suggestions and request from any source.

The Commission is publicly funded and is thus subject to the reporting requirements of the Public Finance Management Act (Act No 1, 1999).

The obligations of the PFMA include an audit by the Auditor General.
In line with its Constitutional mandate, the vision of the Commission for Gender Equality remains to strive for “a society free from all forms of gender oppression and inequality”, while its mission includes to “advance, promote, protect, monitor and evaluate gender equality through undertaking research, public education, policy development, legislative initiatives, effective monitoring and litigation”.
7.3 Strategic Focus of the CGE and budget for 2018/19 The Commission for Gender Equality aims to ensure that gender equality is promoted and unfair discrimination is eradicated within the policies and practices of Government, other state institutions, and private organisations, in line with outcome 3 (all people in South Africa are and feel safe) and outcome 11 (create a better South Africa, a better Africa and a better world) of Government’s 2014-2019 Medium Term Strategic Framework.
The 2018 Estimates of National Expenditure indicates that the Commission for Gender Equality will over the medium term continue to advance policies that contribute to the eradication of gender inequality and unfair discrimination within the practices of government and the private sector.
The entity aims to focus on challenging gender stereotypes and changing perceptions by raising awareness and educating the public, monitoring state compliance with regional and international conventions, covenants and charters and building an effective and sustainable organisation that will fulfil its constitutional mandate on gender equality.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 129 The above will be done by undertaking education and information programmes as well as engaging with civil society organisations to promote gender equality.

It will also continue to investigate individual complaints of gender related matters and carry out a number of investigations per year that are related to the systematic violations of gender rights.
It will also continue to monitor and report on state compliance on various international and regional instruments including the Conventions on the Elimination of All Forms of Discrimination Against Women (CEDAW), the Sustainable Development Goals (SDGs) and the African Charter on Human and People’s Rights.

For the period 2018/19, the Commission for Gender Equality received a budgetary allocation of R80 735 000.
This is a R2.5 million increase from 2017/18 financial year is not sufficient to cover the growing spending pressures due to inflation and demands for service delivery betterment.

Considering that the CGE received an R8.4 million increase between 2016/17 and 2017/18, the R2.5 million is a nominal amount.
The greatest portion of the budget will be spent on compensation of employees (R57 209 600) due to its work is carried out by internal personnel and thus the main driver of spending is compensation of employees and R23 525 400 is for goods and services.

The majority of the Commission’s budget (R45.1 million) will be spent on the service delivery programme of which R26.7 million (59.2%) is allocated towards provincial offices.
The mandate of the CGE will be realised through the following 3 strategic objectives and sub-strategies: 7.3.1 Strategic Objective 1 The purpose of Strategic Objective 1 is to advance an enabling legislative environment for gender equality.

Strategic Objective 1 has been allocated R24 850 200 for 2018/19.

This will be achieved through the following sub-strategies: • Monitor compliance with international and regional treaties and conventions.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 130 [Wednesday, 9 May 2018 • Evaluate existing and recommend new legislation • Investigate, monitor and evaluate organs of state and private sector for gender equality.

7.3.2 Strategic Objective 2 The purpose of Strategic Objective 2 is to promote respect for and protection, development and attainment of gender equality.

This Strategic Objective has been allocated R20 332 040.
This will be achieved through the following sub-strategies: • Develop, conduct and manage public education and information programmes.

• Investigate, resolve any disputes or rectify any act or omission to ensure redress on gender discrimination.

• To liaise and interact with organisations which acts actively and promotes gender equality 7.3.3 Strategic Objective 3 The purpose of the Strategic Objective 3 is to build and sustain an efficient organisation to effectively promote and protect gender equality.
Strategic Objective 3 has been allocated R35 552 820.

This will be achieved through the following sub-strategies: • Good governance structure and coordination mechanism.

• To improve Human resource management and development • To improve financial and Supply Chain Management • To provide optimal information, communication technology (ICT support for the efficient and effective management of the organisation) • To develop and implement corporate communication strategy.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 8.
Observations 131 Having met with the Department to scrutinise the Strategic Plan, Annual Performance Plan and budget for 2018/19 and the Commission for Gender Equality on its Annual Performance Plan for 2018/19, the Committee made the following observations: 8.1 Department of Women in the Presidency General • The Committee noted with concern that the Department tabled its Annual Performance Plan 2018/19 (APP) late which will result in a finding against the Department as confirmed by the Auditor General of South Africa (AGSA) and requested an explanation in this regard.
• The Committee noted with concern that the Department had not implemented many of the recommendations from the 2017 BRRR and questioned how the APP for 2018/19 was developed if compliance was lacking.3 To this end, the Committee was also concerned with the AGSA’s repeat findings against the Department and the tendency of the Department to bring about changes to its APP towards the end of a financial year.
The Department had brought about changes to its APP for three consecutive years.4 • The Committee noted that not all of the Department’s targets were SMART and lacked the requisite details even in the Technical Indicators Descriptors of the APP.
This is a repeat finding of the Committee as stipulated in the previous Budget Vote report of 2017.5 3 Portfolio Committee on Women in the Presidency (2017) Budgetary Review and Recommendation Report on the Portfolio Committee on Women in the Presidency, dated 18 October 2017, ATC 151, 24 October 2017 4 The Minister of Women in The Presidency (a) Revised Annual Performance Plan of the Department of Women for 2015/16, ATC 9, 16 February 2016.

Subsequent to that changes were brought to 2016/17 and 2017/18.
5 Portfolio Committee on Women in the Presidency (2017) Report of the Portfolio Committee on Women in the Presidency on Annual Performance Plan (Budget Vote 13) of the Department of Women in the Presidency and the Commission for Gender Equality (CGE) for financial year 2017/18, dated 23 May 2017, ATC 65, 23 May 2017.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 132 [Wednesday, 9 May 2018 • The Committee sought clarity around what the actual changes to the Department’s vision, mission, Strategic Plan and APP entailed.

The Committee reaffirmed that the Department’s lack of understanding of its mandate had a direct impact on its delivery of targets as this was evident in the Committee’s oversight during quarterly and annual reporting to date.
As such, the Committee also questioned the reemergence of gender-based violence, notwithstanding its importance, as a key priority focus area for the Department when the Committee was informed by the Department at its inception that the Department of Social Development would be taking the lead in this regard.
• The Committee questioned how the Department will monitor and evaluate the issues raised in the State of the Nation Address 2018 from a gendered perspective such as land redistribution, youth unemployment, jobs summit etc.

as the current APP was silent in reflecting on these issues.

• The Committee queried the cost implications for refining the Strategic Plan of the Department.
• The Committee enquired as to how many targets were outstanding and carried over from 2017/18 to 2018/19 and what the financial implications were if any.

• The Committee was optimistic about the new leadership for the Department, remained concerned about the non-delivery of targets as was evident in the Committee’s assessment of the Department’s 1st and 2nd quarterly reports for 2017/18.

• Whilst the Committee commends the Departmental areas of focus, i.e.
Access to Development Finance and Enterprise Development opportunities for Women; Ownership Pattern and Management Control in Top listed 100 companies of JSE; Skills Development for Women Entrepreneurs and Women`s Access to Credit, Land and Property the Committee still remained concerned as to what exactly ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 133 the Department will be examining in each of these areas.
It was not clear to the Committee as to what the Department’s strategy to Monitor and Evaluate these areas in the absence of a finalised framework which is an ongoing concern expressed by the Committee.
Furthermore, given the Committee’s oversight and conferral with the Portfolio Committee on Rural Development and Land on land reform and insights into what the challenges are at a national and provincial level, the Committee is not clear as to what precisely the Department of Women would be assessing in this regard.

With respect to the top listed 100 companies, the Grant Thornton 2016 Women in Business Survey provides a very comprehensive report in this regard.
In addition, National Treasury produced a research report in September 2017, Ownership of JSE listed companies.

Hence, given the Department’s limited resources it is unclear as to what new body of evidence the Department will be producing in this regard.

Governance • The Committee queried how many investigations have been completed and are currently underway and the outcome of the investigations that was completed in 2017.
• The Committee noted with concern the corruption allegations in KwaZulu-Natal related to the sanitary dignity campaign and asked the Department how it will deal with such corruption matters.
Finances: • The Committee commended the Department for lobbying National Treasury to allocate more funds for posts in its core programmes but was still concerned that it received the smallest allocation when comparing all Votes and that the allocation was even smaller when removing the transfer to the Commission for Gender Equality.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 134 [Wednesday, 9 May 2018 • Programme 2, Social Transformation and Economic Empowerment, encompasses the core of the Department’s mandate, which is to champion gender equality and the achievement of women’s socioeconomic empowerment and rights.

This programme, however, once again received the smallest operating budget at R25.7 million which is concerning for the Committee as it wants to see the Department deliver on its mandate.
• Programme 3 sees a significant increase from 2017/18 to 2018/19 in its budgetary allocation (from R21.6 million to R44.8 million) and the employment of more personnel (from 21 in 2017/18 to 31 in 2018/19).

This programme commits to producing several reports for 2018/19, however details in the regard is unclear.

The Committee’s oversight is thus hampered when the Department does not clearly stipulate the nature of these reports thus holding the Department to account in this regard is challenging.
• The Committee maintains that even though Programme 1 received R6 million less than in the 2017/18 financial year, this programme still consumes the highest proportion of the Department’s budget and staff allocation yet the Department’s core mandate is carried out in Programme 2 and 3 which is concerning.
• The Committee noted with concern that the Department has allocated R19.2 million in 2018/19 for Travel and subsistence but has provided no detailed breakdown as to how these funds will be utilised across Programmes 1 to 3.

Furthermore, the Committee notes that the CGE has allocated R6 million for 2018/19 for Travel and Subsistence which it will utilise across all its 9 provincial offices for legal clinics, outreach etc.

and for international travel.


Use of consultants • The Committee noted that the Department will commission service providers to review the Inter-Ministerial Committee on the Integrated Plan of Action to address violence against women and children and requested reasons as to why service providers were commissioned and what the costs incurred would be.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] Human Resources 135 • The Committee noted that the Department has a vacancy rate of 10% and requested the Department to provide a breakdown of these vacant posts.
• Even though Programme 1 still consumed the largest proportion of staff within the Department, the Committee noted and appreciated that that National Treasury allocated further R11 million to fill posts in Programmes 2 & 3 and requested the Department to furnish more details in this regard i.e.

nature of the posts.


Core programmatic issues • National Gender Machinery (NGM) & Gender-Based Violence (GBV): The Committee commended the Department on the revival of the NGM and the Inter-Ministerial Committee to deal with Gender Based Violence and questioned how the Committee will be established.
To this end, the Committee enquired whether the new Committee will be based on a similar structure to that of the National Council on Gender Based Violence which was previously launched and chaired by the Deputy President.

Furthermore, the Committee noted that the Department of Social Development was the custodian of the policy dealing with violence against women and children in the country.
As such, in the Department of Social Development’s 2018/19 APP, under Programme 4, the Department of Social Development will be taking the Integrated South African Programme of Action for Gender Base Violence to Cabinet for approval.

The Committee was concerned that the Department of Women was now leading a process for dealing with the prevention of violence against women and children but that that the partnership and collaboration with front line service delivery departments was not apparent.
To this end, the Committee also questioned how the Department would develop the costing for the policy when it is not a service delivery implementing department.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 136 [Wednesday, 9 May 2018 • Sanitary Dignity: The Committee requested the Department to comment on the Committee’s previous suggestion to lobby for the zero rating of sanitary towels and progress made in this regard.
• Collaboration & Partnership: The Department was encouraged to work with the Commission for Gender Equality and other government departments such as the Departments of Police, Justice etc.

to ensure that women benefit in programmes rendered and to avoid duplication.
• Policy Frameworks: The Department was requested to explain the difference between the broader Monitoring and Evaluation Framework which was said to be complete, the Gender Responsive Budget Framework and the Women’s Financial Inclusion Framework.

Furthermore, the Committee noted with concern that many of these frameworks have been long standing items since the inception of the Department and kept rolling over from year-to-year as these have yet to be finalised and implemented.
To this end, the Committee was particularly concerned that most of these policies will only be implemented in 2019/2020 the final year of the MTEF.

Moreover, what was still lacking was an overarching monitoring and evaluation framework that can be applied across government which would guide the work of the Department.

Such a framework would also take into consideration information that would be required for treaty compliance for which the Department should be giving guidance on.
• Treaty compliance: Whilst the Department was commended on the engagements at the 2018 United Nations Commission on the Status of Women (CSW), the Committee indicated that what was lacking was the report back to the CSW on how far South Africa has come in terms of implementing recommendations/resolutions undertaken.
• Intervention mechanisms and tools: The Department makes reference to Intervention mechanisms on policies and programmes for mainstreaming social empowerment and participation of women ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 137 and Economic transformation mechanisms/tools but does not provide any detail as to what these intervention mechanisms and tools are or how it has defined social empowerment and economic transformation.
Whilst the Committee acknowledges these are important, the Committee has requested of the Department on numerous occasions before to brief the Committee on what these mechanisms and tools entail.

To date, this has not been forthcoming.

8.2 Commission for Gender Equality • The Committee commended the Commission on its presentation.
• The Committee was concerned about the proposed amalgamation of chapter 9 institutions and the implications for the CGE who is currently providing an invaluable service, yet under-resourced but managing its finances optimally to deliver on its targets.

• The Committee indicated that the AGSA recommended that CGE should address the indicator related to the handling of complaints in 2017/18 financial year and requested progress report in this regard.
• The Committee noted that dealing with backlog of complaints has been a challenge for the CGE and questioned whether measures have been put in place to address the issues over the next 5 years.

The Committee also enquired as to how the Commission would achieve the target and in so doing deal with the backlog of complaints.

• The Committee enquired about the Commission’s plan regarding moving from a manual to electronic system as a means of increasing efficiency with regards to recording of complaints.
• The Committee enquired as to whether the Commission had any targets that were not met in 2017/18 financial year and if so how this would be implemented in 2018/19.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 138 [Wednesday, 9 May 2018 • The Committee asked whether the Commission will focus on the in private or public sector when dealing with women procurement programmes and with which universities hearings will be conducted.
• The Committee noted that there was Public Education and Information Support and Public Education and Information and queried the difference between the two line items.

• The Committee requested the Commission to comment on the Traditional Courts Bill with particular reference to widows.

• The Commission was requested to assist political parties in ensuring that women with disabilities should be on party political lists.
• The Committee questioned what the role of Commissioners were in the delivery of Strategic Objectives 1 to 3 and the related targets.

9.

Responses by the Department and the CGE During the Committee meetings on the APPs for 2018/19, the Department and the CGE responded to issues raised by the Committee as indicated below.
9.1 Department’s Responses • Late submission of APP: The Department apologised for submitting late and indicated that changes needed to be made to the APP to ensure better alignment with the refined Strategic Plan.

• Sanitary Dignity Framework: The Department committed to submitting the draft Sanitary Dignity Framework to the Committee for consideration and input within a week.
• Collaborating with the CGE: The Department reassured the Committee it would work more collaboratively with the CGE in a bid to avoid duplication.

To date, the new Minister of Women in the Presidency had met once with the Chairperson of the CGE but intends having follow-up engagements to look at strengthening working relationships.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 139 • Gender Responsive Budgeting and Women Financial Inclusion Frameworks: The Minister indicated that a workshop should be held to understand the issue of Gender Responsive Budget and Planning.

The Department will provide the Committee with a document (within a week) which is a base document but subject to further consultations and refinement.
The Women’s Financial Inclusion is a study to determine whether women are empowered in big companies more specifically the number of women on JSE listed companies.

This issue also relates to access to land by women, land ownership and control as well as inheritance especially for women in rural areas.
• Monitoring and Evaluation (M&E) Frameworks: The Department indicated that it has a M&E framework but this was developed for internal use within the Department only which will be sent to the Committee within a week.

The Department is in the process of developing a tool that will focus on gender responsive planning.
In addition, the Department informed the Committee that it was working with the Department of Planning Monitoring and Evaluation on ensuring that monitoring and evaluation is engendered which entails earmarking specific gender indicators and undertaking evaluations from a gendered perspective.

• Gender Focal Points: The Department indicated that it was collaborating with the Department of Public Service and Administration on finalising the Cabinet memo pertaining to Gender Focal Points.
Once endorsed, the Gender Focal Point positions would need to be implemented with clear roles and responsibilities to strengthen gender mainstreaming within Government departments.
• Targets not completed and carried over to 2018/19: The Department indicated that the Gender Responsive Budgeting Framework will be carried over to 2018/19 and does not have financial implications and only the work pertaining to the implementation of the Cabinet Memo on Gender Focal Points will have cost implications for Government departments if approved.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 140 [Wednesday, 9 May 2018 • Zero rating of sanitary towels: The Department indicated that it will mobilise and influence zero rating of sanitary towels.

• Use of consultants: The Department indicated that this was technical support paid by USAID.

• 2018 SONA priorities: The Department indicated that it has prioritised all issues raised during SONA 2018.
Furthermore, the Department indicated that it will request other departments to use their budget and ensure women benefit from programmes offered.

• Vacancy rate: The Department indicated that it will respond in writing to the Committee on the vacancy rate but also some other posts have been advertised within a week.
• Issues raised in BRRR and by AGSA: The Department indicated that it has appointed the Chief Financial Officer and has advertised a post for Director position, Supply Chain Management in a bid to respond to recommendations of the AGSA and that outlined in the BRRR 2017.

• Removing budget of CGE from the Department: The Department indicated that it will engage internally within the Department and National Treasury on the issue.
• National dialogues: The Department indicated that it will submit a preliminary consolidated report to the Committee which will be province specific within a week.

• Investigations: The Department indicated that it will submit a detailed report to the Committee and that some staff members have been placed on precautionary suspension already within a week.

• CSW: The Department committed to providing a report to the Committee within a week.
9.2 CGE’s Responses • Difference between PEI Support and Public Education and Information: The Commission indicated that the PEI Support is a person that support and coordinated activities of the PEI department nationally.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 141 • AGSA audit and backlog of cases: The Commission indicated that they have finalised those issues and made changes in as far as the audit of the previous year is concerned.
• Case management system: The Commission indicated that used the savings from 2017/18 to roll out the case management system.

• Shelters and women on correctional services: The Commission indicated that they have dealt and received referrals from other institutions on cases and issues related to shelters.

They will engage with shelters to document challenges faced by these institutions and will also look at whether legislation dealing with shelters is assisting victims of abuse.
The CGE also indicated that the women in the correctional programme is a research project done by the Commission.

• National elections: The Commission indicated that they have a significant amount of work and received submissions on the issue.

They indicated that there is a need to legislate for 50/50 representation to ensure the enforcement of women representation.
• Commissioners role: The Commission indicated that the Commissioners are chairing committees within departments where they take up issues and discuss them at plenaries.

• Hearings with University: The Commission indicated that the University of Mpumalanga and the Nelson Mandela University must still appear before the Commission.
• Traditional Courts Bill: The Commission indicated they have made submissions on the Bill and will forward their submission to the Committee and will continue to monitor the process within Parliament.

10.
Recommendations Having considered the Strategic Plan, Annual Performance Plans and budget for the Department of Women in the Presidency and the Commission for Gender Equality, the Committee recommends as follows: ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 142 [Wednesday, 9 May 2018 10.1 Department of Women in the Presidency: The Committee recommends that the Minister of Women in the Presidency ensures the following recommendations are implemented: • The Department should forward all outstanding documents to the Committee e.g.
but not limited to draft Sanitary Dignity Framework, internal Monitoring and Evaluation Framework etc.

by 15 May 2018.

• The Department should brief the Committee at its 2nd quarterly report for 2018/19 on progress made with regards to work done on the Departmental areas of focus i.e.

i.e.
i.e.

Access to Development Finance and Enterprise Development opportunities for Women; Ownership Pattern and Management Control in Top listed 100 companies of JSE; Skills Development for Women Entrepreneurs and Women`s Access to Credit, Land and Property.

• The Department should submit all completed reports and investigations and a progress report on new investigations by 15 May 2018.
• The Department should submit its latest organogram that reflects the posts which National Treasury had allocated additional funding for by 15 May 2018.

• The Department should submit a detailed report of what the current vacant posts are by 15 May 2018.

• The Department should engage with National Treasury regarding its actual budget allocation which is small within Vote 13 after the transfer of the CGE funds and report back to the Committee at the 1st quarterly report briefing for 2018/19.
• The Department should foster stronger working relationships and collaborate with other Government Departments and the CGE to avoid duplication and report back to the Committee at quarterly report briefings.

• The Department should inform the Committee of all events for the year planned in a timeous manner in order for the Committee to be aware of the activities and make arrangements to attend.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 143 • The Department should submit in detail how it intends utilising the R19.2 million allocated for Travel and Subsistence within Programme 1, 2 and 3.

This breakdown should clearly stipulate which events/initiatives will be funded that incur expenses for travel and subsistence and what the expenses entail by 15 May 2018.
10.2 Commission for Gender Equality • The Commission to prioritise government departments that have performed poorly in terms of gender transformation at SMS level.

• The Committee commended the CGE for the work it pursues and encouraged the CGE to strengthen its working relationship with the Department of Women in the Presidency.

11.
11.

Conclusion The Committee thanked the Department and the Commission for Gender Equality for the presentations and emphasised the importance of submitting the additional information as requested.

Report to be considered.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 144 [Wednesday, 9 May 2018 5.
REPORT OF THE PORTFOLIO COMMITTEE ON COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS ON THE ANNUAL PERFORMANCE PLAN AND BUDGET VOTE 4 OF THE DEPARTMENT OF COOPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS, DATED 8 MAY 2018 The Portfolio Committee on Cooperative Governance and Traditional Affairs (the Committee), having met with the Department of Cooperative Governance and Traditional Affairs and the entities reporting to it, on their five-year Strategic Plan, Annual Performance Plans (APP) and Budget for 2018/19 financial year, reports as follows: 1.
BACKGROUND In terms of section 55(2) of the Constitution of the Republic of South Africa, (Act 108 of 1996), the National Assembly must provide for mechanisms: (a) to ensure that all executive organs of state in the national sphere of government are accountable to it; and (b) to maintain oversight of – (i) the national executive authority, including the implementation of legislation; and (ii) any organ of state.
The Money Bills Amendment Procedure and Related Matters Act, (Act 9 of 2009) vests powers in Parliament to reject or recommend budgets of national government departments.

The Act further makes provision for the implementation of recommendations emanating from the Committee oversight.
The Committee exercises its mandate of oversight in line with the above-mentioned legislative framework over the Department of Cooperative Governance and Traditional Affairs (CoGTA) and its entities, namely: the Municipal Demarcation Board (MDB); the Commission for the Promotion and Protection of the Rights of ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 145 Cultural, Religious and Linguistic Communities (CRL Rights Commission); the South African Local Government Association (SALGA); and the National House of Traditional Leaders (NHTL).
The Committee met with the Department of CoGTA on 27 and 28 March, to receive a briefing on the Strategic and Annual Performance Plans and the Budget of the Departments and MISA.

The Committee also met with the SALGA, CRL Rights Commission and MBD on 17 and 18 April 2018 to receive a briefing on their Five-year Strategic Plan, APP and their Budget.

2.
2.

DEPARTMENT OF COOPERATIVE GOVERNANCE 2.1 OVERVIEW OF THE 2017/18 FINANCIAL YEAR • Through its Regional and Urban Development and Legislative Support Programme (Programme 3), the Department envisaged continuing to facilitate the restructuring of the municipal space economy through monitoring the implementation of the Integrated Urban Development Framework (IUDF).
• The Department of Cooperative Governance also envisaged continuing with the implementation of a specific revenue plan in 30 municipalities by the end of the financial year.

• The COGTA ministry further envisaged effecting amendments to the Municipal Structures Act (Act No.

177 of 1998) and the Municipal Systems Act (Act no.32 of 2000).

These amendments are still outstanding.


• The Department also introduced the Customary Initiation Bill to regulate the cultural initiation practice in order to reduce the number of fatalities emanating from the practice.

The Department successfully introduced to Parliament amendments to the Traditional Leadership and Governance Framework Act (Act No.

41 of 2003).
41 of 2003).

2.2 POLICY PRIORITIES FOR 2018/19 The Department contributes to outcome 9 (responsive, accountable, effective and efficient local government system) of government’s medium- term strategic framework, which gives expression to the National Development Plan’s (NDP) vision for building a capable and developmental ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 146 [Wednesday, 9 May 2018 state through interdepartmental coordination and strengthening local government.
In this regard, the Department will prioritise: Investment in skills development in municipalities.

• • Providing infrastructure planning, delivery, operation and maintenance, infrastructure management, financial management and resolve governance and administration issues in the 27 priority district municipalities, as well as in the 55 municipalities diagnosed as distressed or dysfunctional.
• Improving water conservation and water demand management in municipalities in order to curb non-revenue water losses in view of the difficult situation South Africa is facing as a water scarce country.

• Coordinating multi-sectoral intervention measures to address the drought situation in all affected provinces.
2.3 BUDGET ANALYSIS Programme Budget Nominal Real Nominal % Real % Rand Rand change change change change R million 2017/18 2018/19 2017/18-2018/19 2017/18-2018/19 Programme 1: 244,3 258,6 14,3 0,8 5,85 per 0,34 per Administration cent cent Programme 2: 248,6 103,5 - 145,1 - 150,5 -58,37 per -60,54 per Regional and Urban Development and Legislative Support cent cent Programme 3: 57 63 5 738,4 2 448,2 10,00 per 4,27 per Institutional Development 373,1 111,5 cent cent Programme 4: 548,1 592,2 44,1 13,2 8,05 per 2,41 per National Disaster Management Centre cent cent ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 147 Programme 5: Local 16 15 - 693,6 - 1 -4,23 per -9,22 per Government Support 409,8 716,2 512,9 cent cent and Intervention Programme 6: 3 640,1 3 869,9 229,8 28,1 6,31 per 0,77 per Community Work Programme TOTAL cent cent 78 83 5 187,9 826,9 6,61 per 1,05 per 464,0 651,9 cent cent The Table above indicates that the annual budget of the Department of Cooperative Governance and Traditional Affairs for the 2018/19 financial year increases by approximately one percent in real terms – from 78.4 billion in 2017/18 to R83.6 billion in 2018/19.
As the Graph below illustrates, Programme 3: Institutional Development, which receives an additional R2.4 billion for the Local Government Equitable Share (LGES), largely accounts for the Department’s overall increase.
Cooperative Governance and Traditional Affairs 2017/18 2018/19 70 000.0 60 000.0 50 000.0 40 000.0 0 0 0 0 30 000.0 0 0 ' 20 000.0 10 000.0 0.0 1 2 3 4 Programmes 5 6 Although Budget 2018 allocates an additional R2.4 billion to the LGES, thus increasing it from R57 billion in 2017/18 to R62 billion in 2018/19, the reality is that in 2018/19 government will spend more on interest payments than on transfers to local government.
Since 2011/12, interest payments have grown faster than allocations to national, provincial or local government, crowding out space for increasing productive expenditure.1 1 Parliament of RSA (2018).
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 148 [Wednesday, 9 May 2018 2.3.1 Programme 1: Administration Sub-Programme Budget Nominal Real Nominal Real % Rand Rand % change change change change R million 2017/18 2018/19 2017/18-2018/19 2017/18-2018/19 Sub-Programme 1: 26,7 29,4 2,7 1,2 10,11 per 4,37 per Administration cent cent Sub-Programme 2: 18,3 18,4 0,1 - 0,9 0,55 per -4,70 per Management cent cent Sub-Programme 3: 104,9 113,5 8,6 2,7 8,20 per 2,56 per Corporate Services cent cent Sub-Programme 4: 36,4 40,6 4,2 2,1 11,54 per 5,72 per Financial Services cent cent Sub-Programme 5: 16,5 13,6 - 2,9 - 3,6 -17,58 per -21,87 per Internal Audit and Risk Management cent cent Sub-Programme 6: 41,6 43,0 1,4 - 0,8 3,37 per -2,02 per Office Accommodation cent cent TOTAL 244,4 258,5 14,1 0,6 5,77 per 0,26 per cent cent As the Table above indicates, the allocation to Programme 1: Administration, which provides strategic leadership, management and support services to the Department, increases by 0.6 percent.
Accounting for this increase, as the Graph below indicates, are sub-programmes 1, 3 and 4, which receive real increases of R1.2 million, R2.7 million, and R2.1 million respectively.

There are no significant issues raised in respect of this Programme.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 149 Administration 120.0 100.0 80.0 60.0 0 0 0 0 0 0 ' 2017/18 2018/19 40.0 20.0 0.0 Sub-Programmes 2.3.2 Programme 2: Regional and Urban Development and Legislative Support Sub-Programme Budget Nominal Real Nominal % Real % Rand Rand change change change change R million 2017/18 2018/19 2017/18-2018/19 2017/18-2018/19 Sub-Programme 1: 1,5 3,4 1,9 1,7 126,67 per 114,85 per Management: Regional and Urban Development and Legislative Support cent cent Sub-Programme 2: 3,4 6,3 2,9 2,6 85,29 per 75,63 per Local Government Legislative Support and Institutional Establishment cent cent Sub-Programme 3: 18,5 10,6 - 7,9 - 8,5 -42,70 per -45,69 per Urban Development Planning cent cent ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 150 [Wednesday, 9 May 2018 Sub-Programme 4: 12,4 11,5 - 0,9 - 1,5 -7,26 per -12,09 per Spatial Planning Districts and Regions cent cent Sub-Programme 5: 8,3 10,7 2,4 1,8 28,92 per 22,19 per Intergovernmental Policy and Practice cent cent Sub-Programme 6: 139,7 0,0 - 139,7 -100,00 per Municipal Demarcation Transition Grant cent Sub-Programme 7: 57,6 53,6 - 4,0 - 6,8 -6,94 per -11,80 per Municipal Demarcation Board cent cent Sub-Programme 8: 7,0 7,4 0,4 0,0 5,71 per 0,20 per South African Cities Network TOTAL cent cent 248,4 103,5 - 144,9 - 150,3 -58,33 per -60,51 per cent cent As the Table above indicates, the allocation to Programme 2: Regional and Urban Development and Legislative Support,
 decreases by 60.5 percent in real terms.
The Programme provides policy analysis towards improving local government and cooperative governance.

The Graph below indicates that the decrease in allocation to the Programme mainly relates to the discontinuation of the Municipal Demarcation Transition Grant in sub- programme 6.

The Municipal Systems Improvement Grant (sub-programme 9 under Programme 3) will make funds available for the completion of demarcation transition work.
However, the 45.6 percent decrease in allocation to sub-programme 3 (Urban Development Planning) and 12 percent decrease in sub-programme 4 (Spatial Planning Districts and Regions) are concerning given Budget 2018’s emphasis on urban renewal and spatial transformation, and on how cities are the heart of the national economy.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 151 Regional and Urban Development and Legislative Support 160.0 140.0 120.0 100.0 0 0 0 0 0 0 ' 80.0 60.0 2017/18 2018/19 40.0 20.0 0.0 Sub-Programmes 2.3.3 Programme 3: Institutional Development Programme Budget Nominal Real Nominal % Real % Rand Rand change change change change R million 2017/18 2018/19 2017/18-2018/19 2017/18-2018/19 Sub-Programme 1: 2,6 3,5 0,9 0,7 34,62 per 27,60 per Management - Institutional Development cent cent Sub-Programme 2: 8,8 10,2 1,4 0,9 15,91 per 9,87 per cent Municipal Human Resource Management Systems cent Sub-Programme 3: 28,8 33,1 4,3 2,6 14,93 per 8,94 per cent Municipal Finance cent Sub-Programme 4: 7,9 7,3 - 0,6 - 1,0 -7,59 per -12,41 per Citizen Engagement cent cent Sub-Programme 5: 5,3 5,5 0,2 - 0,1 3,77 per cent -1,64 per Anti-Corruption and Good Governance cent ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 152 [Wednesday, 9 May 2018 Sub-Programme 6: 8,3 12,0 3,7 3,1 44,58 per 37,04 per Municipal Property Rates cent cent Sub-Programme 7: 57 62 5 719,7 2 449,3 10,03 per 4,30 per cent Local Government 012,1 731,8 cent Equitable Share Sub-Programme 8: 31,3 33,1 1,8 0,1 5,75 per cent 0,24 per cent South African Local Government Association Sub-Programme 9: 103,2 115,1 11,9 5,9 11,53 per 5,72 per cent Municipal Systems Improvement Grant cent Sub-Programme 10: 152,5 153,3 0,8 - 7,2 0,52 per cent -4,72 per Department of Traditional Affairs cent Sub-Programme 11: 12,2
 6,8 - 5,4 - 5,8 -44,26 per -47,17 per United Cities and Local Government of Africa cent cent TOTAL 57 63 5 738,7 2 448,5 10,00 per 4,27 per 373,0 111,7 cent cent As indicated in the Table above, allocation to Programme 3 (Institutional Development) increases by 4.2 percent in 2018/19.
The Graph below indicates that the increase mainly relates to the R2.4 billion increase in sub- programme 7 (Local Government Equitable Share).

The Programme seeks to build institutional resilience in the local government system.

While the R2.4 billion increase in the LGES is welcome, there is a concern that personnel spending may be crowding out the service delivery impact of higher LGES allocations.
Using a sample of 11 rural municipalities that received higher transfers because of the new LGES formula, which is significantly more redistributive towards poorer and rural municipalities, National Treasury found that over the period 2012/13 to 2015/16, increased personnel spending absorbed a large share of the higher transfers.
Staff numbers remained unchanged over the same period, implying that the ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 153 increased spending resulted mainly from significantly higher wages for existing posts.2 Institutional Development 70 000.0 60 000.0 50 000.0 40 000.0 0 0 0 0 30 000.0 0 0 ' 20 000.0 10 000.0 0.0 2017/18 2018/19 11 1 2 10 5 Programme 4: National Disaster Management Centre Sub-Programmes 9 3 7 8 4 6 2.3.4 Programme 4: National Disaster Management Centre As the Table below indicates, allocation to the National Disaster Management Centre (NDMC), which promotes an integrated and coordinated system of disaster prevention, mitigation and risk management, increases by 2.4 percent or R13.3 million in real terms during the 2018/19 financial year.
Programme Budget Nominal Real Nominal % Real % Rand Rand change change change change R million 2017/18 2018/19 2017/18-2018/19 2017/18-2018/19 Sub-Programme 1: 3,7 3,8 0,1 - 0,1 2,70 per -2,65 per Management: Head of National Disaster Management Centre cent cent Sub-Programme 2: 53,4 52,9 - 0,5 - 3,3 -0,94 per -6,10 per Disaster Risk Reduction, Capacity Building and Intervention cent cent 2 National Treasury (2018).
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 154 [Wednesday, 9 May 2018 Sub-Programme 3: 6,0 6,4 0,4 0,1 6,67 per 1,11 per Legislation and Policy Management cent cent Sub-Programme 4: 4,3 4,5 0,2 0,0 4,65 per -0,80 per Integrated Provincial Disaster Management Support, Monitoring and Evaluation Systems cent cent Sub-Programme 5: 3,4 3,5 0,1 - 0,1 2,94 per -2,43 per Fire Services cent cent Sub-Programme 6: 27,5 27,0 - 0,5 - 1,9 -1,82 per -6,94 per Information Technology, Intelligence and Information Management Systems cent cent Sub-Programme 7: 423,7 472,9 49,2 24,5 11,61 per 5,79 per Disaster Relief Grant cent cent Sub-Programme 8: 26,1 21,3 - 4,8 - 5,9 -18,39 per -22,65 per Municipal Disaster Recovery Grant cent cent TOTAL 548,1 592,3 44,2 13,3 8,06 per 2,43 per cent cent The Graph below indicates that the bulk of National Disaster Management Centre’s (NDMC) budget is concentrated on sub-programme 7, which disburses the Disaster Relief Grant (DRG).
The DRG receives an additional R24.5 million in 2018/19 in recognition of the fact that disaster in South Africa - and drought in particular - shows no signs of abatement in provinces such as the Western Cape, Eastern Cape and the Northern Cape.
On 22 March 2018, the Minister of Cooperative Governance Traditional Affairs, Dr Zweli Mkhize, announced that Government has made available, from the DRG, a total amount of R433.5 million as immediate disaster relief funding for drought within the affected provinces.3 3 SA Government Online (2018).
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 155 National Disaster Management Centre 500.0 450.0 400.0 350.0 300.0 0 0 250.0 0 0 0 200.0 0 ' 150.0 100.0 50.0 0.0 2017/18 2018/19 Sub-Programmes 2.3.5 Programme 5: Local Government Support and Intervention Management Programme Budget Nominal Real Nominal % Real % Rand Rand change change change change R million 2017/18 2018/19 2017/18-2018/19 2017/18-2018/19 Sub-Programme 1: 3,3 3,5 0,2 0,0 6,06 per 0,53 per Management: Local Government Support and Interventions cent cent Sub-Programme 2: 58,8 11,1 - 47,7 - 48,3 -81,12 per -82,11 per Municipal Performance Monitoring cent cent Sub-Programme 3: 26,5 26,0 - 0,5 - 1,9 -1,89 per -7,00 per Local Government Improvement Programme cent cent Sub-Programme 4: 12,4 8,0 - 4,4 - 4,8 -35,48 per -38,85 per Litigation and Interventions cent cent ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 156 [Wednesday, 9 May 2018 Sub-Programme 5: 36,1 37,4 1,3 - 0,6 3,60 per -1,80 per Municipal Infrastructure Administration cent cent Sub-Programme 6: 15 15 - 603,6 - 1 400,6 -3,80 per -8,81 per Municipal Infrastructure 891,3 287,7 cent cent Grant Sub-Programme 7: 381,5 342,5 - 39,0 - 56,9 -10,22 per -14,90 per Municipal Infrastructure Support Agent cent cent TOTAL 16 15 - 693,7 - 1 513,0 -4,23 per -9,22 per 409,9 716,2 cent cent Budget 2018 includes proposals to reduce conditional infrastructure grants of provincial and local government by R28 billion over the medium term.
Consequently, the Municipal Infrastructure Grant (MIG), which constitutes the bulk of the budget allocation in Programme 5, is subject to a spending cut of approximately 9 percent in 2018/19.

Government expects the structure of the formula used to allocate this grant to reduce the impact of reductions on smaller municipalities.
The Financial and Fiscal Commission (FFC) has cautioned that the proposed reductions on key infrastructure grants would be self-defeating if infrastructure deteriorates and becomes inadequate for the continued provision of basic services.4 In this regard, the FFC has advised that government design a plan to reprioritise infrastructure funding in the coming years as a matter of urgency.

4 Parliament of RSA (2018).
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 157 Local Government Support and Intervention Management 18 000.0 16 000.0 14 000.0 12 000.0 10 000.0 0 0 0 0 0 0 8 000.0 ' 2017/18 2018/19 6 000.0 4 000.0 2 000.0 0.0 Sub-Programmes 2.3.6 Programme 6: Community Work Programme The Community Work Programme (CWP) seeks to respond to the structural nature of unemployment in South Africa to help address the paradox of an economy unable to absorb the labour of people willing to and able to work.
It contributes to sub-outcome 5 (local public employment programmes expanded through the Community Work Programme) of outcome 9 (responsive, accountable, effective and efficient local government system) of government’s medium-term strategic framework.

As the Table below indicates, the Programme receives an additional R28.1 million in 2018/19 – a real increase of 0.7 percent compared to the previous financial year.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 158 [Wednesday, 9 May 2018 Programme Budget Nominal Real Nominal % Real % Rand Rand change change change change R million 2017/18 2018/19 2017/18-2018/19 2017/18-2018/19 Sub-Programme 1: 3 587,2 3 814,1 226,9 28,1 6,33 per 0,78 per Management: Community Work Programme cent cent Sub-Programme 2: 40,4 42,6 2,2 0,0 5,45 per -0,05 per Programme Coordination cent cent Sub-Programme 3: 12,5 13,2 0,7 0,0 5,60 per 0,09 per Partnerships, Norms, Standards and Innovation cent cent TOTAL 3 640,1 3 869,9 229,8 28,1 6,31 per 0,77 per cent cent The bulk of the expenditure in the Programme, as the Graph below illustrates, is concentrated on sub-programme 1 (Management: Community Work Programme).
Research by the FFC indicates that spending on the Expanded Public Works Programme (EPWP) in general, and the CWP in particular, has had a significant positive effect on the total level of employment for metros, but not for other urban municipalities, namely secondary cities and large towns.5 However, following persistent challenges around the CWP’s Implementing Agents, it is welcome that the Department will be introducing a new Non-Profit Organisation Transfer Model with effect from 01 April 2018.
5 FFC (2017).

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 159 Community Work Programme 4 500.0 4 000.0 3 500.0 3 000.0 2 500.0 2 000.0 0 0 0 0 0 0 ' 2017/18 2018/19 1 500.0 1 000.0 500.0 0.0 1 2 3 Sub-Programmes 3.

DEPARTMENT OF TRADITIONAL AFFAIS 3.1 OVERVIEW OF THE 2017/18 FINANCIAL YEAR The 2017/18 financial year included the following highlights: • The successful reconstitution of all the seven Provincial House of Traditional Leaders for the 2017-2022 term.
• The Department also expected to introduce the Customary Initiation Bill to regulate the cultural initiation practice in order to reduce the number of fatalities emanating from the practice.

The introduction of this Bill to Parliament was still pending at the time of writing.

• The Department successfully introduced to Parliament amendments to the Traditional Leadership and Governance Framework Act (Act No.
41 of 2003) 3.2 POLICY PRIORITIES FOR 2018/19 The DTA contributes to outcome 14 (nation building and social cohesion) of government’s 2014-2019 medium-term strategic framework, which gives expression to the National Development Plan’s (NDP) vision of creating an ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 160 [Wednesday, 9 May 2018 inclusive rural economy and transforming society through a unified country.
Its policy priorities in this regard include: • Strengthening of traditional leadership institutions; • Transforming the sector through development of policies and legislation; • Fostering partnerships towards sustainable livelihoods in traditional communities; • Promoting the cultural and customary way of life in accordance with the Bill of Rights, and • Promoting social cohesion and nation building.
3.3 BUDGET ANALYSIS Programme Budget Nominal Real Nominal % Real % Rand Rand change change change change R million 2017/18 2018/19 2017/18-2018/19 2017/18-2018/19 Programme 1: 43,3 45,5 2,2 - 0,2 5,08 per -0,40 per Administration cent cent Programme 16,6 16,6 0,0 - 0,9 0,00 per -5,21 per 2:Research, Policy and Legislation cent cent Programme 3: 92,6 91,1 - 1,5 - 6,2 -1,62 per -6,75 per Institutional Support Coordination cent cent TOTAL 152,5 153,2 0,7 - 7,3 0,46 per -4,78 per cent cent As indicated in the Table above, the allocated budget for the DTA in 2018/19 decreases by 4.7 percent in real terms compared to the previous financial year.
The Graph below indicates that the bulk of the Department’s allocation is concentrated in Programme 3: Institutional Support Coordination, which transfers funds to the CRL Rights Commission and the National House of Traditional Leaders, as well as fund the legal costs around traditional leadership disputes and claims.

There are no significant issues to raise in respect of Programmes 1 and 2.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 161 Department of Traditional Affairs 100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 0 0 0 0 0 0 ' 2017/18 2018/19 1 2 Programmes 3 Programme 3: Institutional Support and Coordination As noted earlier, Programme 3 constitutes the bulk of the Department’s budget allocation.

The Table below indicates that the allocation to the Programme for 2018/19 decreases by 6.6 percent in real terms.
Programme Budget Nominal Real Nominal % Real % Rand Rand change change change change R million 2017/18 2018/19 2017/18-2018/19 2017/18-2018/19 Sub-Programme 1: 1,7 1,8 0,1 0,0 5,88 per 0,36 per Management cent cent Sub-Programme 2: 6,7 7,3 0,6 0,2 8,96 per 3,28 per Institutional Development and Capacity Building cent cent Sub-Programme 3: 7,5 8,3 0,8 0,4 10,67 per 4,90 per cent Intergovernmental Relations and Partnerships cent ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 162 [Wednesday, 9 May 2018 Sub-Programme 4: 19,1 18,5 - 0,6 - 1,6 -3,14 per -8,19 per National House of Traditional Leaders cent cent Sub-Programme 5: 42,4 42,8 0,4 - 1,8 0,94 per -4,32 per Commission for the Promotion and Protection of the Rights of Cultural, Religious, and Linguistic Communities cent cent Sub-Programme 6: 15,1 12,4 - 2,7 - 3,3 -17,88 per -22,16 per Disputes and Claims Resolutions cent cent TOTAL 92,5 91,1 - 1,4 - 6,1 -1,51 per -6,65 per cent cent The Graph below indicates that the transfer to the CRL Rights Commission constitutes the lion’s share of the Programme budget.
However, the allocated to the Commission decreases by 4.3 percent in real terms, which is concerning given the Commission’s inability to fulfil its mandate, such as convening National Consultative Conferences.

The allocation to sub- programme 6: Disputes and Claims Resolutions also decreases by 22 percent, which is inconsistent with the Department’s objective of reducing the number of traditional leadership disputes and claims over the medium term strategic framework period.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 163 Institutional Support and Coordination 2017/18 2018/19 45.0 40.0 35.0 30.0 25.0 0 0 0 20.0 0 0 0 ' 15.0 10.0 5.0 0.0 Sub-Programmes 4 MUNICIPAL INFRASTRUCTURE SUPPORT AGENT (MISA) 4.1 OVERVIEW OF THE 2017/18 FINANCIAL YEAR In the 2017/18 APP, MISA was upfront about the challenges it faced in fulfilling its core mandate of resolving the problem of technical incapacity in municipalities.
For example: • Inadequate internal capacity was constraining MISA’s efforts to accelerate delivery and extend its reach to a higher number of municipalities.

• There were also difficulties around the redeployment of technical professionals to the 27 district municipalities prioritised for support, due to persisting capacity gaps in the municipalities that were receiving support.

• There were further institutional challenges around the system of training and developing technical skills.
• Additional challenges included a high turnover rate among skilled and experienced technical professionals in local government; the appointment of technical officials without requisite qualifications and/or experience by municipalities; and poor absorption and retention of graduates by municipalities after they complete their training with MISA support.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 164 [Wednesday, 9 May 2018 Despite these challenges, MISA continued with the process of addressing backlogs in the 27 priority districts identified in 2011.

4.2 POLICY PRIORITIES FOR 2018/19 MISA contributes to outcome 9 (responsive, accountable, effective and efficient local government system) of government’s 2014-2019 medium- term strategic framework.
For the 2018/19 financial year, the entity envisages the following: • Deploying 100 artisans and wastewater process controllers to needy municipalities at the beginning of March 2018.6 • Providing infrastructure planning, delivery, operation and maintenance, infrastructure management, financial management and resolve governance and administration issues in the 27 priority district municipalities, as well as in the 55 municipalities diagnosed as distressed or dysfunctional.
• Improving water conservation and water demand management in municipalities in order to curb non-revenue water losses in view of the difficult situation South Africa is facing as a water scarce country.
4.3 BUDGET ANALYSIS Programme Budget Nominal Real Nominal % Real % Rand Rand change change change change R million 2017/18 2018/19 2017/18-2018/19 2017/18-2018/19 Programme 1: 60,3 67,9 7,6 4,0 12,54 per 6,67 per Administration cent cent Programme 2: 321,2 262,0 - 59,2 - 72,8 -18,42 per -22,68 per Technical Support Services cent cent Programme 3: 0,0 12,6 12,6 11,9 - - Infrastructure Delivery Management Support TOTAL 381,5 342,5 - 39,0 - 56,9 -10,23 per cent -14,91 per cent 6 Department of Cooperative Governance and Traditional Affairs (2018).
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 165 The allocated budget for MISA decreases by almost 15% in 2018/19, as indicated in Table above.

As the Graph below indicates, the bulk of the budget reduction relates to Programme 2: Technical Support Services, which is central to MISA’s mission and mandate of rendering technical advice to municipalities to enable them to optimise municipal infrastructure provisioning.
The funds allocated to this Programme mainly cover the costs of remunerating technical professionals responsible for the provision of technical support to municipalities, as well as payments to professional service providers appointed to supplement the technical capacity created through technical professionals.7 5 IMPLEMENTATION of 2017/18 RECOMMENDATIONS The following information below is progress report regarding the implementation of 2017/18 recommendations by the Department of CoGTA.
Recommendation Action taken The Committee advises that DCOG and An Inter-ministerial task team headed by the National Treasury should monitor the Minister of Cooperative Governance and adherence to the agreements between Traditional has been set up to look at these municipalities, Eskom and Water Boards to issues.
The Committee had joint meetings with ensure that proactive interventions can be the PC on Energy, PC on Public Enterprises and made if a municipality fails to pay for PC on Water and Sanitation to get status updates services rendered.
The Department should report to the Committee received update Committee on a quarterly basis on progress made with regard to payment of government debt to municipalities; Salga should have continuous engagements Resolved with Eskom to assist the municipalities with the issues of payment of bulk electricity accounts; 7 MISA (2018).
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 166 [Wednesday, 9 May 2018 National Treasury should brief the The committee was briefed on this issue committee on the activities of the Municipal Financial Recovery Service; MISA should brief the Committee, by June Resolved 2017, on what action plan they have in place to strengthen controls in supply chain management, the management of performance information as well as human resource capacity.
The Committee requests that the DCOG Ongoing process improves the management of the CWP contracts signed with implementing agents; an asset register for CWP that adheres to the minimum requirements for an asset register, as prescribed by National Treasury must be maintained by the Department.

The Committee must organise a workshop Ongoing process with the CRL rights commission and other relevant Portfolio Committees, to discuss the challenges of initiation and religious institutions.
The Department should brief the Ongoing Committee by June 2017 on when the Local Government: Laws Amendment Bill will be finalised and brought for Parliamentary processing.

6 COMMITTEE OBSERVATIONS 6.1 The presentations by the Department and its entities was appreciated and interrogated by Members of the Committee.

6.2 The Committee noted that, Budget Speech made specific reference to the importance of urban renewal and spatial transformation, and to how cities are at the heart of the national economy.
The 45.6 percent decrease in allocation to sub-programme 3 (Urban Development Planning) and 12 percent decrease in sub-programme 4 (Spatial Planning Districts and Regions) appears inconsistent with this policy priority.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 167 6.3 The Committee noted with concern that despite the strained fiscal environment and cuts to local government allocations, there has been a clear prioritisation of funding to municipalities, including a real growth in the equitable share allocation over the 2018 medium-term expenditure framework period.8 Research by National Treasury indicates that this funding growth has been commensurate with increase in personnel expenditure rather than service delivery.
6.4 The Committee observed with concern that, the Minister of Finance stated that in the 2018/19 financial year, government has set aside a provisional allocation of R6 billion for several purposes, including drought relief and to augment public infrastructure investment.’ How much of this R6 billion will go towards drought relief needs clarification, as the rate of increase (R24.5 million) in the Disaster Relief Grant appears inadequate in view of the state of national disaster declared in respect of the Cape Provinces.
6.5 The low number of skilled technical professionals and artisans is one of the major constraints facing the majority of South African municipalities.

Yet, over the medium term, MISA proposes to decrease the number of apprentices enrolled in its Artisan Development Programme (ADP), namely 230 in 2018/19, 180 in 2019/20 and 120 in 2020/21.
6.6 The Committee notes that MISA’s presentation on its 2018/19 APP provides no indication on progress in respect of the problems constraining the implementation of its annual targets for the previous financial year, including inadequate internal capacity and problems around the redeployment of technical professionals to the 27 priority districts.

6.7 The committee notes with concern that the MISA has not appointed a permanent CEO as the current incumbent is still acting.
This is notwithstanding the assertion on page 11 of the entity’s APP where it claims that it has made tremendous efforts towards the appointment of a permanent Chief Executive Officer over the past financial year.

8 Financial and Fiscal Commission (2018).

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 168 [Wednesday, 9 May 2018 6.8 The Committee takes note of the real 4.3 percent decrease in budget allocation to the CRL Rights Commission.
The Commission is in dire need of financial resources to, among other things, convene National Consultative Conferences with religious, linguistic and cultural communities.

The importance of this has become urgent following the recent tragic incident of criminality perpetuated under the guise of religion in Engcobo.

6.9 One of the Department’s strategic objectives over the medium term is to reduce the number of traditional leadership disputes and claims.
However, the budget allocated for the resolution of traditional leadership disputes and claims decreases by 22 percent in real terms for 2018/19.

7 COMMITTEE RECOMMENDATIONS Further, the Committee is encouraged by the Annual Performance Plans for 2017/18 of the Department of Cooperative Governance and Traditional Affairs, SALGA, CRL Rights Commission, MISA and MDB, and accordingly supports their implementation.
The Committee recommends that the 2018/19 budget allocation to the Department of Cooperative Governance and Traditional Affairs and its entities, be approved.

Report to be considered.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 169 6.
Report of the Portfolio Committee on Agriculture, Forestry and Fisheries on the 2018/19 Annual Performance Plan and the Budget of the Department of Agriculture, Forestry and Fisheries (Vote 24) and its Entities, dated 08 May 2018 The Portfolio Committee on Agriculture, Forestry and Fisheries (hereinafter referred to as the Committee) examined Budget Vote 24: Agriculture, Forestry and Fisheries including the Annual Performance Plan of the Department of Agriculture, Forestry and Fisheries (hereinafter referred to as DAFF or the Department) for the 2018/19 financial year and budget projections for the Medium Term Expenditure Framework (MTEF) period ending in 2020/21.
During the process, the Portfolio Committee also examined the 2018/19 Annual Performance Plans (APPs) and Budgets for the MTEF period, of the following DAFF Public Entities: Marine Living Resources Fund (MLRF) Onderstepoort Biological Products (OBP) Agricultural Research Council (ARC) National Agricultural Marketing Council (NAMC) Perishable Products Export Control Board (PPECB) The APP of the MLRF was considered in conjunction with that of the Department (DAFF) as the MLRF is responsible for funding operational activities of the Department’s Programme 6, i.e.
Fisheries Management.

Having considered the APPs and Budget Vote 24, which includes the Department and its entities, the Committee reports as follows: 1.

Introduction The Strategic Plans, APPs and Budgets of DAFF and its Entities were tabled in Parliament as required in terms of the Public Finance Management Act (PFMA), 1999 (Act No.

1 of 1999), on 12 March 2018.


All the tabled plans were referred to the Portfolio Committee on Agriculture, Forestry and Fisheries for consideration and report on 14 March 2018.
In preparation for ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 170 [Wednesday, 9 May 2018 the briefings by the Department and entities on their Annual Performance Plans, on 13 February 2018, the Committee engaged with the Department on its draft APP and on 13 March 2018, it engaged with the Auditor- General of South Africa (AGSA) and the Department of Planning, Monitoring and Evaluation (DPME) on DAFF’s final APP.
In performing its constitutional mandate, the Committee held briefings with DAFF and its entities to consider the 2018/19 APPs of DAFF and its Entities on 20 and 22 March 2018, respectively, taking into account their alignment with the objectives of the National Development Plan (NDP): Vision 2030 and the Medium Term Strategic Framework (MTSF) 2014- 2019.
The Committee, in considering the Department and its Entities’ 2018/19 APPs and Budget Vote, wanted to determine whether the funds that are allocated to the Department and its entities through different programmes translate to actual service delivery, particularly in rural and underserviced areas.

In this regard, the Money Bills Amendment Procedure and Related Matters Act, 2009 (Act No.

9 of 2009), grants Parliament the power to reject, recommend or amend budgets of departments and entities.

2.
2.

Consideration of the 2018/19 Annual Performance Plans (APPs) and Budgets of the Department of Agriculture, Forestry and Fisheries and its Entities The Department of Agriculture, Forestry and Fisheries strategic planning process was largely informed by the MTSF Outcomes (Outcomes 4, 7 and 10), the Department contributes to the realisation of the goal of the National Development Plan (NDP) to eliminate poverty and reduce inequality by 2030.
In response to Vision 2030 (NDP), the Nine Point Plan’s Revitalisation of Agriculture and Agroprocessing Value Chain (RAAVC) and the MTSF, DAFF identified priority areas and developed short to medium and long term strategies.
The 2018/19 Annual Performance Plan of DAFF is also informed by the two Operation Phakisa interventions namely, ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 171 the Oceans Economy and Operation Phakisa for Agriculture, Land Reform and Rural Development.
The 2018/19 APP of DAFF outlined actions, indicators and targets that will be pursued over the medium term to accelerate service delivery within agriculture, forestry and fisheries sectors through promotion of food security, creating decent jobs, sustainable growth of the country’s economy and contribution to the Gross Domestic Product (GDP).

The budget allocation of the Department (Budget Vote 24) for the 2018/19 financial year is R7.2 billion, a slight increase of R358 million from 2017/18.
The budget has been allocated according to the six programmes of the Department, namely, Programme 1: Administration; Programme 2: Agricultural Production, Health and Food Safety; Programme 3: Food Security and Agrarian Reform; Programme 4: Trade Promotion and Market Access; Programme 5: Forestry and Natural Resources Management and Programme 6: Fisheries Management.

Approximately 76% of the Department’s total budget for 2018/19 will be allocated to three Programmes, namely, Programmes 2, 3 and 5.
As indicated on Table 1, the largest share is allocated to Programme 2 (Agricultural Production, Health and Food Safety), which constitute 33 per cent of the total budget, followed by Programme 3 (Food Security and Agrarian Reform) with 28.4 per cent and then Programme 5 (Forestry and Natural Resources Management) with 15 per cent.
The Department’s budget allocation to these Programmes is aligned with its stated priority foci for the MTEF period, which are, increasing food security, creating jobs and improving the contribution of agriculture to the GDP.

In addition, the three Programmes are responsible for Parliamentary Grant transfers to Entities and disbursement of conditional grants to provinces e.g.
CASP through Programmes 3 and 5; Ilima/Letsema through Programme 2; and CASP (flood-damaged infrastructure) and LandCare through Programme 5.

Budget allocation to Programmes 2 and 3, which are priority programmes in terms of the Department’s focus for the MTEF, will increase at an average of 5 per cent and 7 per cent, respectively, over the MTEF period.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 172 [Wednesday, 9 May 2018 Table 1.
Budget Allocation per Programme for the MTEF Period (2018/19 – 2020/21) Programme R Million 1.

Administration 2.

Agricultural Production, Health & Food Safety 3.

Food Security & Agrarian Reform 4.

Trade Promotion & Market Access 5.

Forestry & Natural Resources Management 6.
Fisheries Management 2018/19 allocation 2019/20 allocation 2020/21 allocation Proportion of the total Vote for 2018/19 R 923.2 R 931.5 R 938.0 12.9 % R2 367.1 R2 507.7 R2 596.2 33.0% R2 037.9 R2 305.0 R2 369.1 28.4% R 273.9 R 291.3 R 309.6 3.8% R1 075.1 R1 046.0 R1 047.4 15.0% R 487.8 R 519.7 R 553.2 6.8% Total R7 165.0 R7 601.2 R7 813.5 100% Adapted from National Treasury (Estimates of National Expenditure, 2018) Approximately R2.4 billion (33 per cent) of the total budget is transferred to provinces and municipalities as conditional grants, which is equivalent to 60 per cent of the R4 billion that is allocated to transfers and subsidies in 2018/19.
Approximately 73 per cent (R1.75 billion) of the total conditional grants budget is allocated to the Comprehensive Agriculture Support programme (CASP); and the rest to Ilima/Letsema and LandCare grants.

The CASP grant transfers are made through Programme 3 and Programme 5 for infrastructure, extension recovery planning, agricultural colleges and disasters.
The Ilima/Letsema grant is transferred through Programme 2 and focuses on increasing food production, rehabilitating irrigation schemes and other value adding projects.

An amount of R522.4 million will be transferred to provinces through the grant in 2018/19.

For the LandCare programme, an amount of R77.8 million will be transferred through Programme 5.
As indicated in Table 2, in terms of Public Entities, the Department’s budget transfers for the 2018/19 financial year will constitute R1 billion to the Agricultural Research Council (ARC) through Programme 2; R259.7 million to the Marine Living Resources Fund (MLRF), which is responsible for all operational activities for Programme 6; R43.2 million to the National ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 173 Agricultural Marketing Council (NAMC) through Programme 4; R6.6 million to Ncera Farms (Pty) Ltd through Programme 3 and R600 000 to the Perishable Products Export Control Board (PPECB) specifically for skills development and training of smallholder farmers.
Table 2.

Budget Allocation to Entities for the MTEF Period Entity 2018/19 allocation 2019/20 allocation 2020/21 allocation R Million 1.

Agricultural Research Council 2.

Onderstepoort Biological Products 3.

Marine Living Resources Fund 4.

National Agricultural Marketing Council 5.

Perishable Products Export Control Board 6.


Ncera Farms (Pty) Ltd Total R932.1 R984.1 R1 038.1 - - - R259.7 R274.3 R289.4 R43.2 R0.6 R45.7 R0.5 R48.2 R0.5 R7.4 R1 383.6 Adapted from National Treasury (Estimates of National Expenditure, 2018) R6.6 R1 242.2 R7.0 R1 311.6 The Onderstepoort Biological Products does not get any transfer from the Department.
It received a once-off allocation of R492 million for the 2013/14 to 2015/16 MTEF period from National Treasury for revamping of its aged vaccine manufacturing plant.

The allocation, which it was highlighted even then that it was not sufficient for the revamp and modernisation of the facility as OBP buildings were built in the 1960’s, has since been depleted.
The Department allocated R162.5 million to the Land and Agricultural Development Bank of South Africa (Land Bank) through Programme 3 and Programme 4 to support smallholder farmers.

3.

Overview of Committee Deliberations and Observations on the 2018/19 APP and MTEF Budget of DAFF including the MLRF The Committee welcomed the presentations that were made by the AGSA and DPME on DAFF’s APP and budget over the MTEF.
The AGSA commended DAFF for the improvement in its APP, while DPME raised some pertinent issues that DAFF did not consider when drafting its final ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 174 [Wednesday, 9 May 2018 APP.

The Committee raised a concern regarding the level and manner of engagements between DAFF and DPME during the drafting and finalisation of the APP.
A need for a better alignment of conditional grant objectives and allocation, as well as monitoring of grants as previously raised by the Committee was still of great concern to the Committee.

Committee Observations The Committee further welcomed the presentation by DAFF, which included the MLRF, on the Department’s objectives in relation to its 2018/19 APP and budget.
The Committee was generally satisfied with the presentation that was made by DAFF on its APP as some of the key sectoral matters that were highlighted by the DPME which were previously raised by the Committee in its engagement with DAFF on the draft APP, were partly incorporated in the final 2018/19 APP.
During the engagements and discussions with the Department including the MLRF, the Committee made comments and raised the following for the Department’s attention: 3.1 The Department outlined the planned policies which are key for sector development with no provision for timeframes as some of the policies have been under development for the past 3 years or more, for example, Policy on Comprehensive Producer Support, National Policy on Extension and Advisory Services, Development Finance Policy, and the Policy for the Sustainable Management of Range and Forage Resources.
3.2 Delays in the development and finalisation of key legislation such as the Preservation and Development of Agricultural Land Framework (PDALF) Bill, which is one of the most important Bills for the sector that is also targeted in the Medium Term Strategic Framework (MTSF).

The Bill is expected to be submitted to the Minister only in 2019/20, which means that the Bill will not be implemented by 2019 as it was stated in the 2017/18 APP and is expected in the MTSF.
The Aquaculture Bill, which is also a sectoral priority in terms of aquaculture development, which was planned to be submitted to Cabinet in the 2017/18 but there is no indication of when the Bill is expected to be tabled in Parliament.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 175 3.3 Finalisation of the agreement with Statistics South Africa (StatsSA) for conducting the Agricultural Census, which has been budgeted for since 2017/18; and status of the Department’s Famer Register, which Stats SA highlighted as essential for conducting an inclusive Agricultural Census to ensure focused support to smallholder and subsistence producers.
3.4 Monitoring and evaluation (M & E) of the implementation and impact of conditional grants and other Department’s interventions still remains a challenge that needs to be addressed.

3.5 The APP did not clearly reflect targets on the rehabilitation and maintenance of harbours while there are fees that are collected for harbour maintenance purposes.
3.6 A concern about the Department’s insufficient budget including the level of human capacity and qualifications of some of its personnel to carry out its legislated mandate.

3.7 Inadequate progress and lack of articulation in the APP, of how the Department plans to radically transform the agriculture, forestry and fisheries sectors.
3.8 Delays in the development of the Fisheries Sector Transformation Charter, the use of fishing rights allocation as a tool to address transformation and finalisation of the process to appoint the Fishing Transformation Council as provided for in the Marine Living Resources Act (MLRA).

3.9 Value for money regarding the R1.6 million that has been used to train Extension Officers in the previous year.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 176 [Wednesday, 9 May 2018 4.
Overview of Committee Deliberations and Observations on the 2018/19 APPs and Budgets of DAFF Entities The Committee acknowledged the budgetary constraints experienced by the ARC, which are directly linked to the inadequate national budget allocation to the Department of Agriculture, Forestry and Fisheries.
Having examined and discussed the 2018/19 APPs and budgets of the Entities, the Committee raised the following: 4.1 The OBP and ARC’s views on the vaccination of poultry against Avian Influenza (bird flu) as they are the institutions that deal with the development of animal vaccines.
4.2 Given the numerous challenges that the agricultural sector face, up to date research and innovation cannot be overemphasised and the Committee raised a concern about the impact that the ARC’s continuing budget cut (Parliamentary Grant) will have on its research activities and ability to raise external revenue; and on possible retrenchments and closure of some research facilities.
4.3 It was further noted that the ARC’s budget cut will also impact the completion of the foot-and-mouth disease (FMD) Vaccine Production Facility, which is expected to play a significant role in the prevention of FMD, a disease of economic importance that severely affects livestock farmers and can cost the red meat industry billions of rands in lost export revenue.
4.4 The Perishable Products Export Control Board (PPECB) was commended for its continued good work that saw a financial recovery from the losses that happened six years ago notwithstanding climatic challenges that affect export volumes and therefore, the entity’s revenue generation.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 177 5.
Committee Recommendations After discussions and deliberations on the Department and the Entities’ 2018/19 Annual Performance Plans (APPs) and Budget Vote 24, the Portfolio Committee on Agriculture, Forestry and Fisheries makes the following recommendations to the National Assembly (NA) for the attention of the Minister of Agriculture, Forestry and Fisheries regarding Budget Vote 24: Funding related matters 5.1 Ensure that the Minister engages with the National Treasury for additional funding to address the continuing underfunding of DAFF, the impact of the budget cuts to the sector, which has been identified in the NDP and the New Growth Path as one of the key sectors through which increased employment and poverty alleviation can be achieved; as well as the limitations that are imposed by underfunding on DAFF’s Public Entities.
Report on progress on the engagements to Parliament by the end of August 2018.

5.2 DAFF should submit to the Committee the applications that have been submitted to the National Treasury, motivating for additional funding for the ARC to ensure timeous completion of the FMD Facility and other research activities that are responsive to inter alia climate change, disease outbreaks, food security and sector competitiveness as well as promotion of indigenous knowledge.
DAFF should submit the documents to Parliament before the end of June 2018.

5.3 Strengthen intergovernmental relations for aligned activities between DAFF, provinces and other departments such as the DRDLR, Department of Trade and Industry (the dti), the Department of Small Business Development (DSBD) and the Department of Water and Sanitation (DWS) to ensure containment of costs, avoid duplication of activities and to maximise service delivery.
In this regard, the ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 178 [Wednesday, 9 May 2018 Minister should continue engagements with the relevant Ministries including the National Treasury while ensuring that the Integrated Agricultural Development Finance Policy that aims to consolidate agricultural development funding into one comprehensive fund, is finalised.
A detailed progress report in this regard should be submitted and presented to joint Parliamentary Committees by the end of September 2018.

Performance and operational matters 5.4 Ensure that the ARC and OBP submit to the Committee a research- based analysis and opinions on the vaccination of poultry against Avian Influenza.

The report in this regard should be submitted to Parliament by the end of October 2018.
5.5 Develop an Action Plan to fast-track policy development and legislative review as these have negative impact on the pace at which DAFF execute its mandate.

Submit the Plan and updated and detailed Policy and Legislative Programmes of the Department with timeframes by the end of August 2018.
5.6 A detailed Action Plan with timeframes should be submitted to Parliament on how DAFF plans to monitor the use of conditional grants in provinces, also indicating shortfalls in areas where these grants will be redirected to other programmes and/or services such as Fetsa Tlala, drought relief and Operation Phakisa.

The Action Plan should be submitted to Parliament by the end of August 2018.
5.7 Engage the Department of Rural Development and Land Reform (DRDLR) to develop an Implementation Plan for Agri-Parks and Operation Phakisa for Agriculture, Rural Development and Land Reform and other overlapping mandates between the two Departments.

A report on progress, highlighting commitments and each Department’s responsibilities, should be submitted to Parliament by the end of August 2018.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 179 5.8 Develop a Policy Framework with an Action Plan on the commercialisation of black farmers and submit to Parliament by the end of August 2018.

5.9 Develop a Strategy with an Action Plan to mitigate the impact of disease outbreaks in the sector including subsequent job losses, to strengthen disease management and to revolutionise veterinary services.
Submit the Strategy and Action Plan to Parliament by the end of August 2018.

5.10 Develop a Policy for the empowerment of women, youth and people with disabilities to ensure their full participation in the agriculture, forestry and fisheries value chains.

The Policy should be linked with the performance agreements of senior managers in the Department and a progress report on its development should be submitted to Parliament by the end of August 2018.
5.11 DAFF should priorities the processing and tabling of the Preservation and Development of Agricultural Land Framework (PDALF) Bill by the end of the 2019/20 financial year.
5.12 Submit to Parliament a progress report on transformation activities and their impact in all three sectors including how the Department is addressing slow progress in all sectors; as well as delays in the development of the Fisheries Sector Transformation Charter and the finalisation of the process to appoint the Fishing Transformation Council.

Progress report should be submitted by the end of August 2018.
5.13 Submit and present to the Committee the reviewed full Organogram of the Department inclusive of all personnel levels and indicating filled, abolished and vacant positions to show its alignment with the Department’s mandate and strategic goals, by the end of June 2018.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 180 [Wednesday, 9 May 2018 5.14 Ensure finalisation of the disciplinary processes against the Department official(s) who approved and authorised an irregular 51% salary increase to the Chief Executive Officer of Ncera Farms (Pty) Ltd during 2015/16; and progress report on the transfer of personnel and budget that has been allocated to Ncera Farms (Pty) Ltd for the medium term expenditure period, to the Agricultural Research Council.
Submit reports on these matters to Parliament by the end of June 2018.

5.15 Submit to the Committee the memorandum of understanding (MOU) that was signed with Statistics South Africa for undertaking the Agricultural Census including a progress report on the development of the national Farmer Register by the end of June 2018.
5.16 Develop a Policy on Peri-urban and Urban agriculture to address food insecurity and poverty in urban areas while ensuring productive use of agricultural land such as municipal commonages in these areas.

Submit progress on the development of the policy to Parliament by the end of September 2018.

Report to be considered.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 181 7.
Report of the Portfolio Committee on Tourism on Strategic Plans and Annual Performance Plans of the National Department of Tourism and the South African Tourism, Budget Vote No.

33: Tourism, dated 9 May 2018 The Portfolio Committee on Tourism, having considered Budget Vote No.

33: Tourism, together with the Strategic Plans and Annual Performance Plans of the National Department of Tourism (NDT) and the South African Tourism (SA Tourism) reports as follows: 1.
Introduction The United Nations World Tourism Organisation reported that destinations around the world achieved a 7 percent growth in 2017 in international tourist arrivals.

This was well above the sustained and consistent trend of 4 percent or higher growth since 2010, and represents the strongest results in seven years.

South Africa did not perform well compared to the global average.
Notwithstanding the unsatisfactory performance in 2017, tourism remains the economic sector with immense potential to address to socio- economic imbalances in the country.

It is important to note that tourism is a foreign income earner and contributes immensely to the trade balance of the country.

It was through tourism, including agriculture, that the country weathered the storm during the technical recession of 2017.

Currently, the sector directly employs more than 700 000 South Africans.
In total, the tourism sector supports more than 1.5 million direct and indirect jobs, which is 9.8 percent of the total employment in the country.

The sector also had a total contribution of R402bn in 2016, which was 9.3 percent of the total gross domestic product (GDP) of South Africa.

The contribution to GDP was expected to grow by 2.5 percent to R412.2bn, which is 9.4 percent of GDP in 2017.
In recognition of the tourism sectors’ contribution to the economy of the country, the President of the Republic, His Excellency Cyril Ramaphosa, in his maiden State of the Nation Address for 2018 acknowledged that “Tourism is another area which provides our country with incredible opportunities to, quite literally, shine.

Tourism currently sustains 700,000 direct jobs and is performing better than most other growth sectors.

There is no reason why it can’t double in size.


We have the most beautiful country in the world and the most hospitable people.

This year, we will enhance support for destination marketing in key tourism markets and take further measures to reduce regulatory barriers and develop emerging tourism businesses”.
This was echoed by the Minister of Finance in his 2018 budget speech where he mentioned that “South Africa needs to be bold and coordinated in building sectors where we have comparative advantage and can be truly ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 182 [Wednesday, 9 May 2018 world class.

These include, but are not limited to mining, agriculture, tourism, as well as manufacturing and service exports to the rest of Africa and globally”.
It is against this background that the Committee has closely scrutinised the budget allocated to Vote 33: Tourism in the 2018 Estimates of National Expenditure to ensure that it is aligned to national priorities.

It is also crucial that the Committee ensures that the Department of Tourism and South African Tourism develop plans that address the socioeconomic imperatives placed on the tourism sector by the government.
In particular, the 2018/19 Annual Performance Plans were examined to ascertain if they contribute to job creation and the GDP of the country.

2.

The Committee Process The Committee received and scrutinised the tourism budget allocated to Vote 33 as outlined in the 2018 Estimates of National Expenditure (ENE) tabled by the Minister of Finance in Parliament in February 2018.
The Speaker of Parliament referred the Annual Performance Plans of the National Department of Tourism and South African Tourism to the Committee in line with Rule 338 of the National Assembly.

The Committee carefully examined the Strategic Plans, Annual Performance Plans, and associated budgets of the National Department of Tourism and South African Tourism in terms of Rule 339 of the National assembly.
As part of this process, the Committee held budget hearings with the National Department of Tourism on the 18th April 2018 and South African Tourism on the 21 March 2018.

The Committee is reporting on the Annul Performance Plans and the budget allocated to the National Department of Tourism and South African Tourism for the 2018/19 financial year in terms of Rule 340 of the National Assembly.

3.
3.

Department of Tourism The Department of Tourism is responsible for the formulation of a legal and regulatory framework for the sustainable development and management of tourism in South Africa.

The Department of Tourism has in the past, been able to provide leadership and good governance for the tourism sector in South Africa.

South Africa is therefore a competitive tourism destination that provides high quality, value for money tourism products, and memorable experiences.
There are numerous externalities that affect the work of the department and this requires collaborations amongst various stakeholders.

The tourism sector is also sensitive to government policy, and policy uncertainty in a number of areas, including immigration regulations and the sharing economy have in the recent past had a negative effect in the growth prospects of the sector.
The department is expected to pay particular attention to these policy issues to ensure a sustainable growth trajectory for the sector.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 183 3.1 The Strategic Plan and Annual Performance Plan The Department tabled its 2018/19 - 2020/21 Strategic Plan with the revised 2018/19 Annual Performance Plan in March 2018.
The Department undertook a restructuring process in the 2016/17 financial and starting implementing the current Strategic Plan in the 2017/18 financial year.

The 2018/19 financial year is thus the second year of Department delivering its mandate under the reconfigured and recalibrated branches and Programmes.

The analysis of the Strategic Plan indicates that the departmental focus for the current financial year is aligned to the national government priorities and the National Development Plan.
However, the budget allocated to the Department does not reflect the economic development mandate given sector.

This budget misalignment continues despite numerous recommendations made by the Committee to the National Treasury in the Budget Review and Recommendations Reports.

the to With regard to the strategic plan, the vision of the Department is to be the leading sustainable tourism development for inclusive economic growth in South Africa.
The vision is to grow an through good inclusive and sustainable corporate and cooperative governance, strategic partnerships and collaboration, innovation and knowledge management, and effective stakeholder communication.

This vision succinctly captures the nature of the tourism sector and its related dynamics.
tourism economy 3.1.1 Organisational strategic objectives is pursuing The Department (12) organisational strategic objectives which are spread over its four Branches/ Programmes: • To ensure economic, efficient and effective use of following twelve the departmental resources, • To enhance understanding and awareness of the value of tourism and its opportunities, • To create an enabling legislative and regulatory environment for tourism development and growth, • To contribute to economic transformation in South Africa.
• To accelerate the transformation of the tourism sector, • To facilitate tourism enterprises to contribute to inclusive economic growth and job creation, the development and growth of • To facilitate tourism capacity-building programmes, • To diversify and enhance tourism offerings, • To provide knowledge services to inform policy, planning and decision- making.
• To reduce barriers to tourism growth to enhance tourism competitiveness, • To enhance regional tourism integration, and ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 184 [Wednesday, 9 May 2018 • To create employment opportunities by implementing tourism projects.

3.1.2 Organisational strategic outcomes-oriented goals The government Medium Term Expenditure Framework pursues a number of strategic outcomes.
The Department is contributing towards the achievement of the four of those government outcomes, namely: • Outcome 4 - Decent employment through inclusive economic growth.

• Outcome 7 - Comprehensive rural development.

• Outcome 11 - Creating a better South Africa, and contributing to a better and safer Africa in a better world.

• Outcome 12 - An efficient, effective and development oriented public service and an empowered, fair and inclusive citizenship.
3.2 The revised National Tourism Sector Strategy targets The Department finalised and published the new National Tourism Sector Strategy (NTSS) in December 2017.

The new targets span a period 2016 - 2026.

The NTSS is a strategic blueprint that channels the future growth trajectory of tourism sector.

The 2018/19 Annual Performance Plans will be assessed, amongst other things, through the extent in which the current NTSS targets are pursued and attained.
The revised NTSS targets are indicated in Table 1 as follows: Table 1: Revised National Tourism Sector Strategy Targets Indicators / Measure of Performance 2015 Direct contribution to National GDP Total contribution to National GDP Number of direct jobs supported by the sector Number of total jobs supported by the sector Increase tourism export earnings Increase in capital investment Indicators / Measure of Performance Source: NDT Strategic Plan 2018 R118 billion R375.502 billion 702 824 2026 Targets (Est.)
R302 billion R941.222 billion 1 mil 1 551 200 2 260 380 R115 billion R64 billion 2015 R359 billion R148.681 billion 2026 Targets (Est.)

The Department is thus expected to conduct stringent monitoring and evaluation of SA Tourism performance to ensure that the country performs well against major economic key performance indicators.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 185 3.3 Departmental spending Expenditure Framework focus during the Medium Term The Department is delivering its constitutional mandate under the following four Programmes (Branches): 3.3.1 Programme 1: Administration (Corporate Management) The purpose of Programme 1 is to provide strategic leadership, management and support services to management.
The sub- programmes for Programme 1 are Ministry; Management; Corporate Management; Financial Management; and Office Accommodation.

3.3.2 Programme 2: Tourism Research, Policy and Internal Relations The purpose for Programme 2 is to enhance strategic policy environment, monitor the tourism sector’s performance and enable stakeholder relations.

The related strategic outcome- oriented goal is to achieve good corporate and cooperative governance.
The objectives of Programme 2 in the 2018/19 financial year, amongst other things, are to: • Provide knowledge services to inform policy, planning and decision-making by: − developing the National Tourism Sector Strategy report on the state of tourism, the implementation report, evaluation training the programme and the tourism incentive programme on the grading of accommodation establishments over the medium term; tourism guide reports on − maintaining mobile applications for tour guides and − developing visitor information centres by March 2019; the national information and monitoring system, and a database for black-owned tourism products and services.
• Enhance regional tourism integration by: tourism − hosting the sharing best practices workshop in 2019 targeted at African countries that have tourism agreements with South Africa − hosting of two tourism initiatives during South Africa’s chairship of the Indian Ocean Rim Association.

• Enhance understanding and awareness of the value of tourism and its opportunities by hosting the annual public lecture, and meetings of the national tourism research committee over the medium term.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 186 [Wednesday, 9 May 2018 The sub-programmes for Programme 2 are as follows: • Tourism Research, Policy and provides International Relations direction, Management, which support comprehensive administration and operational services, and knowledge and management.

This sub programme also manages policy sector and development transformation and responsible tourism.
information evaluation, promotes research, strategic and • Research and Knowledge Management, which oversees impact research, knowledge management and tourism evaluation of the sector.

• Policy Planning and Strategy, which oversees and guides policy and strategy development for the tourism sector, and relations ensures efficient and effective management.
stakeholder • South African Tourism, which stimulates sustainable international and domestic demand for South African tourism experiences, and regulates the standard of tourism facilities and services.

International Relations and Cooperation, which drives South relations and Africa’s cooperation.

international interests through • 3.3.3 Programme 3: Destination Development The purpose of Programme 3 is to facilitate and co-ordinate destination development.
The strategic outcome-oriented goal is inclusive to economic growth.
The objectives for Programme 3 in the 2018/19 financial year, amongst other things, include to: tourism sector’s contribution increase the to • Diversify and enhance tourism offerings by: the − reporting on implementation of 6 destination enhancement projects (Shangoni Gate, Phalaborwa Wildlife Activity Hub, Blyde River Canyon, Hilltop Camp, Gariep Dam Nature Reserve and Dwesa-Cwebe Nature Reserve) in 2018/19; − developing 2 tourism precinct plans by March 2019 (Khayelitsha township and Karoo region); − supporting 6 projects over that contribute to the maintenance or improvement of routes to tourism destinations; the medium term − hosting 2 workshops in each of the 9 provinces to institutionalise the manual as a planning tool by March 2019; implementing the blue flag programme at 25 South African beaches by March 2019; and − developing 3 master plans for prioritised tourism nodes (Sutherland to Carnarvon, Hondeklipbaai to Port Nolloth and Port St Johns to Coffee Bay).
− ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 187 • Create employment opportunities by implementing tourism projects (Lotlamoreng Dam, Phiphidi Waterfall, Platfontein Game Farm, National Youth Chefs, 1 sommelier training training and 1 food safety course, youth hospitality programme) through the expanded public works programme, yielding 6 355 job opportunities in the 2018/19 financial year, and resulting in 13 475 full-time equivalent jobs over the medium term.
The sub programmes for programme 3 are: • Destination Development Management, which provides the leadership and administrative support to strategic programme’s activities; • Tourism Enhancement, which increases the competitiveness of South Africa’s tourism industry; • Destination Planning and Investment Coordination, which ensures that tourism infrastructure supports the current and future growth of the sector; and • Working for Tourism, which facilitates the development of tourism infrastructure projects under the expanded public works programme through labour intensive methods that target the unemployed, youth, women, disabled people and SMMEs.
3.3.4 Programme 4: Tourism Sector Support Services The purpose of Programme 4 is to enhance transformation of the sector, increase skills levels and support its development to ensure that South Africa is a competitive tourism destination.

The strategic outcome-oriented goal for the Programme is to increase the tourism sector’s contribution to inclusive economic growth.
Some of the objectives of this Programme in the 2018/19 financial year are to: • Accelerate the transformation of the tourism sector over the medium term by: − monitoring the implementation of the amended tourism broad-based black economic empowerment sector codes − facilitating 5 social tourism initiatives that promote open access to selected government-owned attractions.
• Facilitate the development and growth of tourism enterprises to contribute to inclusive economic growth and job creation by March 2019 by: − supporting the development of 400 enterprises − launching a tourism incubation programme to implement the enterprise development programme implementing the tourism incentive programme (market tourism grading, energy efficiency, access support, universal accessibility and sector transformation).
Facilitate March 2019 by: tourism capacity building programmes by − • ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 188 [Wednesday, 9 May 2018 − − − the blue flag training in training 577 chefs, 300 programme, 1 200 tourism monitors, 500 food safety inspectors and 60 learners in the resource efficiency training programme; establishing a coordinating body for tourism human resource development; implementing the local government tourism induction programme, focusing on rural areas with tourism potential in 10 district municipalities; and − placing 20 black female managers of tourism enterprises at institutions of higher learning for management training.
The sub programmes for Programme 4 are: • Tourism Sector Support Services Management, which the programme’s support to provides administrative activities; • Tourism Sector Human Resource Development, which facilitates the efficient management and implementation of human resource development initiatives for the tourism sector; • Enterprise Development and Transformation, which facilitates inclusive participation and sustainability in the tourism sector; • Tourism Visitor Services, which ensures information integrity and facilitates accurate information for travelling; and • Tourism Incentive Programme, which creates direct linkages tour operators and between South African international tourism companies by assisting South African tour operators to exhibit their products at trade shows across the world.
inbound 4 Overall budget allocation and expenditure The Department is allocated R2, 261.9 billion in 2018/19 financial year.

Over the medium term, 14.9 per cent (R1.1 billion) of the department’s total budget is allocated to the Working for Tourism sub-programme through the expanded public works programme.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 189 Tourism Budget R million 2017/18 2018/19 2019/20 2020/2012 Nominal Real Nominal Real Increase / Rand Percent Percent Decrease change change in change in in 2017/18 in 2017/18 2018/19 2018/19 Programme 1: 234.1 271.4 290.8 311.6 37.3 23.2 15.93 % 9.89 % Administration Programme 2: Tourism 1 203.1 1 282.0 1 350.5 1 424.8 78.9 12.1 6.56 % 1.00 % Research, Policy and Internal Relations Programme 3: 413.9 401.8 446.2 470.2 -30.1 -51.0 -5.97 % -11.82 % Destination Development Programme 4: Tourism 271.1 306.7 316.8 336.0 35.6 19.6 19.6 % 7.23 % Sector Support Services TOTAL 2 140.2 2 404.3 Table 2: Overall budget allocation for 2018/19 National Treasury (2018) – Vote 33 Tourism 2 261.9 2 542.6 121.7 3.8 5.69 % 0.18 % A total of R310.35 million is allocated for the Compensation of Employees to fund an establishment of 519 posts.
An amount of R245.56 million is budgeted for the Goods and Services.

A total of R1, 482 billion is budgeted for the Transfer and Subsidies, whilst R224, 1 million is allocated to the payments of Capital Assets.

Table 2 depicts the overall budget allocation and expenditure in the medium term.
Vote 33 incurred specific baseline reductions of R27.8 million; R30.3 million; and R33.4 million in the 2018/19, 2019/20, and 2020/2021 respectively for goods and services within the also Destination Development Programme.

There were reductions of R21.2 million; R22.4 million, and RR23.6 million in 2018/19, 2019/20, and 2020/21 respectively in the Expanded Public Works Incentive Programme within the Destination Development Programme.
facilitates The Working the for Tourism programme development of tourism infrastructure that leads to job creation, particularly for SMMEs, and accredited training and skills development facilities and programmes targeted at food safety, as well as young sommeliers and chefs.

These initiatives are expected to create an estimated 13 475 full-time equivalent jobs by 2020/21.
Other specific baseline reductions were for the National Tourism Careers Expo at R109 000, R95 000, and R100 000 in 2018/19, 2019/20, and 2020/21 respectively; and Culture, Arts, Tourism, Hospitality and Sport Sector Education and Training Authority (CATHSSETA) at R7000, R6000, and R7000 in 2018/19, 2019/20, and 2020/21 respectively.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 190 [Wednesday, 9 May 2018 The Department relies on South African Tourism to market the country, and is set to transfer 52.7 per cent (R3.8 billion) of its budget to the entity for this purpose over the MTEF period.

The Cabinet approved an additional funding of R35 million in 2019/20 and R36.9 million in 2020/21 through the economic competitiveness and support package in the Tourism Incentive Programme sub- programme.
This funding is intended to increase economic growth and job creation through the provision of support for market access and tourism grading, the implementation of energy efficiency initiatives, and transformation initiatives that encourage capital investment by black business people.
The leveraged investment capital will be used to support 1 400 small, medium and micro enterprises (SMMEs) in the rural tourism sector over the MTEF period through the enterprise development programme, with the aim of transforming the sector and increasing its geographic footprint.

To remain within the government’s expenditure ceiling for compensation of employees, the department aims to reduce its number of personnel from 519 in 2017/18 to 471 in 2020/21.
including compensation of The operational expenditure, employees, accounts for an estimated 27.5 percent (R2 billion) of the department’s budget over the MTEF period.

5.

Programme budget analysis The Department is executing its mandate through the four Programmes which were recalibrated after the restructuring of the Department in the 2017/18 financial year.
The budget allocation for each programme in the medium term is as follows: 5.1 Programme 1: Administration The purpose of Programme 1: Administration is to provide strategic leadership, management and support services to the department.

The total Administration budget has increased from R234.1million in 2017/18 to R271.4 million in 2018.19.
The overall budget change in Programme 1 was a 15.9 nominal percent change and 9.89 real percent change in the 2018/19 consumes financial 12 percent of Department’s total budget.

Most of the budget in this sub-programme will be spent on Corporate Management which is allocated R172.7 million in the 2018/19 financial year.

Programme year.
This ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 191 Table 3: Budget allocation and expenditure for Programme 1: Administration in the 2018/19 financial year Tourism Budget Nominal Real Rand Nominal Real R million 2017/18 2018/19 Sub- Programme 1: Ministry Sub-Programme 2: Management 25.2 3.1 23.6 2.7 Increase change in Percent Percent / 2018/19 change in change in Decrease in 2018/19 -1.6 -0.4 2018/19 2018/19 -2.8 -0.5 -6.35 % -11.23 % -12.90 % -17.44 % Sub-Programme 3: Corporate 146.1 172.7 26.6 17.6 18.21 % 12.04 % Management Sub-Programme 4: Financial 30.1 35.0 Management Sub-Programme 5: Office 29.6 37.5 4.9 7.9 3.1 5.9 16.28 % 10.22 % 26.68 % 20.08 % Accommodation TOTAL 234.1 271.4 37.3 23.2 15.9 % 9.89 % Source: Adapted from National Treasury (2018) – Vote 33 Tourism This sub-programme had 26.6 percent nominal increase which translates to 17.6 percent in real terms.
With regard to economic classification, the growth in expenditure for Programme 1, which is 55 percent of the sub-programme expenditure, is in the compensation of employees.

Expenditure in this sub-programme will increase from R131.5 million in 2017/18 to R147.9 million in 2018/19.

5.2 Programme 2: Tourism Research, Policy and International Relations relations.
The budget allocation The purpose for Programme 2 is to enhance the strategic policy environment, monitor the tourism sector’s performance and for enable stakeholder Programme 3 as depicted in Table 3 is R1, 282.0 billion in the 2018/19 financial year, which accounts for 94.2 percent of the total branch’s budget.

This sub-programme consumes the largest part of the total departmental budget, which accounts for 56.68 percent.

The nominal increase is R73.7 million, which is R10.7million in real terms.
This accounts for nominal percentage increase of 17.57 percent, which translates to 11.44 percent increase in real terms.

The largest budget allocation in this sub- programme is R1, 208 billion transfer payment to South African Tourism.

The transfer payment to South African Tourism accounts for 52.7 percent of the total departmental budget.

It should be noted that the transfer payment to SA Tourism is critical in maximising the socio-economic impact of the sector.
However, SA Tourism has not achieved their targets in the ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 192 [Wednesday, 9 May 2018 previous financial years, and this expenditure will be closely monitored.

The struggle by SA Tourism to perform in their mandate results in the failure of the tourism sector in it fulfilling its economic mandate.

SA Tourism received R30 million additional budget in the 2018/19 financial year allocated to the South African National Conventions Bureau (SANCB).
The SANCB plays a critical role in growing business tourism.

The budget allocated to SANCB should also drive transformation of business tourism in South Africa by pursuing the geographical spread of business tourism throughout South Africa.
Table 4: Budget allocation and expenditure for Programme 2: Tourism Research, Policy and International Relations in the or 2017/18 and 2018/19 financial years Tourism Budget R million 2017/18 2018/19 Nominal Increase / Decrease in 2018/19 Real Rand change in 2018/19 Nominal Percent change in 2018/19 Real Percent change in 2018/19 Sub- Programme 1: Tourism Research, Policy and International Relations Management Sub-Programme 2: Research and Knowledge Management Sub-Programme 3: Policy Planning and Strategy Sub-Programme 4: South African Tourism Sub-Programme 5: International Relations and Cooperation 7.4 8.7 1.3 0.8 17.57 % 11.44 % 26.0 26.3 0.3 -1.1 1.15 % -4.12 % 11.3 11.7 0.4 -0.2 3.54 % -1.86 % 1 134.3 1 208.0 73.7 10.7 6.50 % 0.95 % 24.1 27.3 3.2 1.8 13.28 % 7.37 % TOTAL Source: Adapted from National Treasury (2018) – Vote 33 Tourism 1 203.1 1 282.0 78.9 12.1 6.6 % 1.00 % Sub-Programme 2: Research and Knowledge Management had a real percentage decrease of -4.12 percent, whilst Sub-Programme 3: Policy Planning and Strategy had a real percentage decrease of -1.86 percent.
With regard to economic classification, the largest budget in this branch goes to transfers and subsidies, which account for 94.7 percent of expenditure.

5.3 Programme 3: Destination Development The purpose of Programme 3: Destination Development is to facilitate and coordinate tourism destination development.

The budget allocation to Programme 3 is depicted in Table 5.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 193 Table 5: Budget allocation and expenditure for Programme 3: Destination Development in the or 2017/18 and 2018/19 financial years Tourism Budget Nominal Real Nominal Real R million 2017/18 2018/19 Decrease 2018/19 2018/19 in Increase Rand Percent Percent / change in change in change in 2018/19 2018/19 Sub- Programme 1: Destination 46.4 20.3 -26.1 -27.2 -56.25 % -58.53 % Development Management Sub-Programme 2: Tourism 19.3 19.0 -0.3 -1.3 -1.55 %t -6.69 % Enhancement Sub-Programme 3: Destination Planning 36.6 27.7 -8.9 -10.3 -24.32 % -28.26 % and Investment Coordination Sub-Programme 4: Working for Tourism 329.5 TOTAL 431.9 334.8 401.8 5.3 -30.1 -12.2 -51.0 Source: Adapted from National Treasury (2018) – Vote 33 Tourism 1.61 %t -3.69 % -7.0 %cent -11.82 % The budget allocation to Programme 3: Destination Development is R401.8 million in the 2018/19 financial year compared to R444 million in 2017/18.
This Programme has experienced a decrease in allocation in all its sub-programmes, with a total decline of 11.82 percent in real terms.

The significant allocation in Programme 3 is a total of R334.8 million to the Working for Tourism programme.

Working for Tourism Programme represents 83.3 percent of the total in this branch.

The Working for Tourism programme is important for the creation of Full-time Equivalent jobs through labour intensive public works programme.
In the previous financial year, the expenditure in this programme was affected by the assessment of the the Government Technical implementation methodology by Advisory Centre.

The Department will be engaged in the rigorous implementation of the infrastructure projects in the 2018/19 financial year and this should be closely monitored.

This is important as an amount of R217.9 million, accounting for 42.3 percent of the Programme budget, will be allocated to the payment of capital assets.
The decline in the budget allocation to Programme 3 is, however, a cause for concern given that this Programme is responsible for service delivery and funding of infrastructure projects meant for transforming the tourism sector.

5.4 Programme 4: Tourism Sector Support The budget allocation for Programme 4: Tourism Sector Support, in the 2018/19 financial year is R306.7 million.
The budget comprises an amount of R68.6 million for the Compensation of Employees and R198.8 million for the Tourism Incentive Programme (TIP).

The projects that will be implemented under this Programme include tourism market access, tourism grading support, tourism destination ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 194 [Wednesday, 9 May 2018 development, and energy efficiency.
Notably, TIP consumes 68.8 percent of the programme budget, followed by 22.34 percent for the Compensation of Employees at 22.34 percent.

The budget allocation for Programme 4 is detailed in Table 6.
Table 6: Budget allocation and expenditure for Programme 4: Tourism Sector Support Services in the or 2017/18 and 2018/19 financial years Tourism Budget Nominal Real Nominal Real R million 2017/18 2018/19 Increase Rand Percent Percent / change change change Decrease in in in in 2018/19 2018/19 2018/19 2018/19 Sub- Programme 1: Tourism Sector 8.4 12.7 4.3 3.6 51.19 %t 43.31 % Support Services Management Sub-Programme 2: Tourism Human 27.5 22.6 -4.9 -6.1 -17.82 % -22.10 % Resource Development Sub-Programme 3: Enterprise 44.4 49.7 5.3 2.7 11.94 % 6.10 % Development and Transformation Sub-Programme 4: Tourism Visitor 22.8 22.9 0.1 -1.1 0.44 % -4.80 % Services Sub-Programme 5: Tourism Incentive 168.0 198.8 30.8 20.4 18.33 % 12.16 % Programme TOTAL 271.1 306.7 35.6 19.6 13.1 % 7.23 % Source: Adapted from National Treasury (2018) – Vote 33 Tourism Programme 4 consumes 13.56 percent of the departmental budget.
In the allocation for the 2018/19 financial year, the Programme experienced a nominal percentage increase of 13.1 percent and a real percentage increase of 7.23 percent.

The largest allocation in this Programme is towards Tourism Sector Support Services with the 51.19 percent nominal increase, which translates to 43.31 percent real percentage increase.

It should be noted that the Department experienced under-expenditure in the Tourism Incentive Programme during the previous financial year.
The Department should improve its implementation methodology and ensure adequate intake of the incentives provided for in the budget.

6.
6.

South African Tourism for marketing South Africa South African Tourism is the Entity of the Department of Tourism responsible internationally and domestically as a preferred tourism and business events destination, ensures that tourist facilities and services are of the highest standard, and monitors and evaluates the performance of the tourism sector as mandated by the Tourism Act (Act No.

3 of 2014) mandates South African Tourism.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 195 6.1 Strategic outcomes-related goals The strategic outcome Performance indicators are as follows: related goals with associated Key Table 7: Key performance areas for SA Tourism per programme PROGRAMME STRATEGIC OBJECTIVE KPI 1.
Corporate Support 2. Business Enablement 3. Leisure Tourism Marketing To achieve operational efficiencies in all activities, including human, marketing and other resources available to South African Tourism To enhance stakeholder and partnership collaboration to better deliver on South African Tourism’s mandate To position South African Tourism to be recognised as a tourism and business events industry leader in market intelligence, insights and analytics To contribute to inclusive economic growth by increasing the number of international and domestic tourists To contribute to an enhanced, recognised, appealing, resilient and competitive tourism and business events brand for South Africa across the target markets and segments 4. Business Events To contribute to inclusive economic growth by increasing the number of international and domestic tourists To contribute to an enhanced, recognised, appealing, resilient and competitive tourism and business events brand for South Africa across the target markets and segments To contribute to an improved tourist experience in line with the brand promise 5.
Tourist Experience Staff satisfaction score achieved Percentage vacancy rate maintained Compliance with Employment Equity Act Unqualified audit report achieved B-BBEE-level achieved Stakeholder satisfaction score achieved Tourist arrivals - international Tourist trips - domestic Tourist revenue – international Tourist revenue - domestic Geographic spread Improve seasonality – international Improve seasonality - domestic Brand awareness Brand positivity SME attendance at SA Tourism Tradeshow Platforms SME participation for all SA Tourism hosting activities Number of business events hosted Number of international delegates hosted Number of bids supported Africa’s Travel Indaba revenue Meetings Africa revenue Number of graded accommodation establishments Number of graded rooms Revenue collected through Grading Source: Adapted from South African Tourism Annual Performance Plan for 2018/19 6.2 Budget appropriation to South African Tourism The budget allocated to SA Tourism in line with the Estimates of National Expenditure appropriation for 2018/19 is R1,439.6 billion.
The allocation to SA Tourism will increase to R1,515.2 billion in 2019/20 and R1, 596.9 billion in 2020/21 respectively.

The average growth rate of the allocated budget is declining, as projected to ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 196 [Wednesday, 9 May 2018 increase by 3 percent in the 2017/18 – 2020/21, compared to 9.7 percent increase in the 2014/15 – 2017/18 MTEF.
The decline in average growth rate has been incurred despite budget increase proposals made by the Committee to the National Treasury in the Budget Review and Recommendations Report of 2017.

The Committee had recommended that SA Tourism develop an Econometric Study to determine the amount of budget required by the tourism sector.

This was done by SA Tourism and the Committee recommendations were forwarded to the National Treasury in line with the findings of the study.
The budget allocation is presented in Table 8.
Table 8: South African Tourism expenditure trends and estimates – 2018/19 – 2020/21 Audited Revised Average Average Medium-term expenditure Average Average R million Rate (%) e/ Total (%) outcome estimate Growth Expenditur Growth Expenditur Rate (%) e Rate (%) Programme 2016/17 2017/18 2014/15 – 2017/18 2018/19 2019/20 2020/21 2017/18 - 2020/21 Administration 102.1 Business Enablement 99.9 140.0 81.3 12.4% 19.2 8.5% 5.7% 132.3 85.9 136.7 90.7 142.5 95.7 Leisure Tourism 847.0 1 045.7 7.7% 73.5% 1 026.3 1 079.0 1 143.0 0.6% 5.6% 3.0% 9.2% 5.9% 71.4% Marketing Business Events Visitor Experience 154.6 54.0 119.0 76.6 21.1% 10.7% 7.8% 4.6% 129.3 65.7 139.3 69.5 142.5 73.3 6.2% 8.8% -1.5% 4.7% TOTAL 1 257.6 1 462.6 9.7% 100% 1 439.6 1 515.2 1 596.9 3.0% 100% Source: National Treasury ENE (2018) – Vote 33 Tourism However, South African Tourism also receives revenue from other sources.
The final budget for the Entity therefore includes revenue from government grant allocation by the National Department of Tourism; TOMSA levies received from levy collectors through the Tourism Business Council of South Africa; Grading fees; and sundry revenue from interest income.

The budget breakdown for SA Tourism showing contributions from various revenue sources is given in table 9.
Table 9: Total budget estimates for SA Tourism – 2018/19 to 2020/21 Revenue 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 (R’000) Audited Audited Audited Estimate Adjustment Approved Estimates Estimates Estimates Government Grant TOMSA levies Indaba, Meetings Africa & Other Exhibitions Grading fees 17 843 18 394 20 569 21 344 21 344 22 561 23 824 25 134 Sundry revenue Total Source: South African Tourism Annual Performance Plan 2018/19 ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 197 The grant from the government represents 83 percent of the total budget.
The funding from TOMSA Levy accounts for 9 percent, Indaba and meetings Africa is 5 percent, grading fees is 2 percent, and sundry income accounts for 1 percent.

6.3 Overall budget expenditure patterns in the MTEF Over the medium term, SA Tourism intends focusing on marketing South Africa as a tourism destination of choice, and increasing the contribution of the sector to the South African economy by increasing the number of tourist arrivals from a projected 11 million in 2017/18 to 13 million in 2020/21.
This is expected to lead to an increase in tourism revenue from R91.7 billion in 2017/18 to R139.3 billion in 2020/21.

Accordingly, the entity’s budget is expected to increase at an average annual rate of 3 per cent, from R1.5 billion in 2017/18 to R1.6 billion in 2020/21.

It should be noted that SA Tourism did not achieve the projected tourist arrivals for the 2017/18 financial year.
The achievement of tourist arrivals will be closely monitored as the non-achievement of this target negatively impacts other key performance indicators.

SA Tourism plans to transfer R713.8 million to all international offices to expand media and trade events tailored to specific markets, media campaigns, customer relations management and joint marketing agreements with private sector operators to collaborate on the marketing of tourism packages.
Through collaborative efforts with stakeholders, South African Tourism plans to implement domestic, regional and international marketing strategies that are informed by research, data and knowledge sharing.

SA Tourism will continue to market South Africa as a destination for business events and provide support for bids to host such events in its efforts to increase the number of business events hosted from 153 to a projected 161 over the MTEF period.
In 2016, South Africa hosted 125 international and regional meetings and conferences, which attracted almost 74 000 delegates.

These events represented 538 combined conference days and generated an estimated R1.1 billion.

The entity plans to spend R129.3 million in 2018/19 to increase the number of delegates attending business events in South Africa to 90 564 in 2020/21.
Revenue generated from international delegates attending conferences and business events is estimated to reach R74.6 billion by 2020/21.

The number of domestic trips taken in South Africa increased from 2.7 million in 2015/16 to 3 million in 2016/17 despite persistently high levels of unemployment and weak economic growth.

This is a good sign that the Entity’s marketing efforts are gaining traction.
However, SA Tourism did not do well in in domestic tourism in the 2017/18 financial year as total domestic trips decreased from 24.3 million in 2016 to 17.2 million in 2017.

This also had an effect ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 198 [Wednesday, 9 May 2018 on revenue generated from domestic tourism as the total domestic revenue decreased from R26.5 billion in 2016 to R22.1 billion in 2017, a decline of 16.6 percent year-on-year in 2017.
To entrench a culture of travel among South Africans, SA Tourism plans to spend R110 million on media campaigns, and R47.1 million on joint marketing agreements and consumer activations.

6.4 Programme analysis SA Tourism implements its mandate through five Programmes.

This follows a recalibration of delivery Programmes, organisational reconfiguration, and staffing.
The budget programme allocation for 2018/19 is as follows: thorough 6.4.1 Programme 1: Administration Programme 1 has a budget of R132.3 million in the 2018/19 financial year, R136.7 million in 2019/20, and increasing to R142.5 million in 2020/21.

This represents an average growth rate of 0.6 percent from 2017/18, and an average expenditure rate of 9.2 percent in 2020/21.
With regard to key performance indicators, SA Tourism will be pursuing 3.4 staff satisfaction score; 7 percent vacancy rate; compliance with Employment Equity Act; Unqualified Audit; and achieving a level 4 BBEE rating.

6.4.2 Programme 2: Business Enablement Programme 2 is allocated R81.9 million in the 2018/19 financial year, R90.7 million in 2019/20, and increasing to R95.7 million in 2020/21.
This represents an average growth rate of 5.6 percent from 2017/18, and an average expenditure rate of 5.9 percent in 2020/21.

With regard to key performance indicators, SA Tourism will be pursuing 4.1 stakeholder satisfaction score in the 2018/19 financial year.

6.4.3 Programme 3: Leisure Tourism Marketing Programme 3 executes the core mandate of SA Tourism.
In the 2018/19 financial year, SA Tourism is pursuing two strategic objectives under Programme 3, namely, SO 1 meant to contribute to inclusive economic growth by increasing the number of international and domestic tourists, and SO 2 meant to contribute to an enhanced, recognised, appealing, resilient and competitive tourism business events for South Africa across the target markets and segments.
Programme 3 is allocated the largest portion of the Entity’s budget with R1, 026.3 billion in the 2018/19 financial year, R1, 079.0 billion in 2019/20, and increasing to R1, 143.0 billion in 2020/21.

This represents an average growth rate of 3.0 percent from 2017/18, and an average expenditure rate of 71.4 percent in 2020/21.
In the ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 199 2018/19 financial year, SAT will be pursuing 11.2 million international arrivals in the financial year and 10.9 million in a calendar year; and a total tourist foreign direct spend (TTFDS) of R81.3 billion in the financial year and R79.6 billion in the calendar year; a 19 percent geographic spread of international tourist arrivals; a seasonality index of international arrivals at 1.35 percent; percentage brand positivity of 39 percent; percentage brand awareness of 78 percent.
; domestic trips at 25.5 million in the financial year and 25.4 million in the calendar year; number of domestic holiday trips at 3.2 million in the financial year and 3.1 million in the calendar year; total domestic direct spend (TDDS) at R27.1 billion in the financial year and R26.7 billion in the calendar year; domestic holiday revenue of R8.3 billion in the financial year and R8.2 billion in the calendar year; a geographic spread of domestic tourists at 12 percent; seasonality index of domestic tourists at 20 percent; a total of 140 SME attendance at SA Tourism Trade Platforms; and participation of 25 SMEs for all SA Tourism hosting activities.
6.4.4 Programme 4: Business events SA Tourism is pursuing two strategic objectives under Programme 4.

These are SO 1, namely, to contribute to inclusive economic growth by increasing the number of international and domestic tourists, and SO 2, namely, to contribute to an enhanced, recognised, appealing, resilient and competitive tourism business events for South Africa across the target markets and segments.
Programme 4 is allocated a budget R129.3 million in the 2018/19 financial year, R139.3 million in 2019/20, and increasing to R142.5 million in 2020/21.

This represents an average growth rate of 6.2 percent from 2017/18, and an average expenditure rate of 8.8 percent in 2020/21.
In the 2018/19 financial year, Programme 3 is pursuing 153 business events hosted in South Africa; 86 006 international delegates hosted in South Africa; 105 bids supported for international and regional business events; and R67.0 million generated through Indaba and Meetings Africa.
The Cabinet approved additional allocations of R30 million in 2018/19, R40 million in 2019/20 and R42 million in 2020/21 to increase South Africa’s competitiveness in attracting business events, and provide increased support for bids to host these events.

The South African Conventions Bureau has performed well in the past in their mandate, having exceeded their targets in the 2017/18 financial year.

The concern remains with the geographical spread of business events into smaller towns.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 200 [Wednesday, 9 May 2018 6.4.5 Programme 5: Tourist experience The strategic objective for Programme 5 is to contribute to an improved experience in line with brand promise.

A budget of R65.6 million is allocated to Programme 5 in the 2018/19 financial year, R69.5 million in 2019/20, and increasing to R73.3 million in 2020/21.
This represents a decrease in average growth rate of -1.5 percent from 2017/18, and an average expenditure rate of 4.7 percent in 2020/21.

In the 2018/19 financial year SA Tourism is pursuing 6 229 number of graded accommodation establishments; 135 262 number of graded rooms; and a total of R22.6 million grading revenue collected.
the quality assurance Over the years, including the 2017/18 financial year, the Tourism Grading Council of South Africa has struggled to achieve the predetermined objectives set for this Programme.

This puts the brand image of south Africa as a tourism destination in jeopardy.

is Consequently, compromised and the country may lose its competitive and comparative advantages.

The country has also experienced an increase in crimes against tourists.
This has struck a blow to the brand image of South Africa as a safe destination.

In response, some countries have issued travel advisories warning potential tourists about crime and related safety matters.

The budget appropriated to this Programme should therefore be utilised, amongst other things, on initiatives intended to deal with safety and security for tourists.

the destination in 7.
Committee observations After a careful scrutiny and examination of the departmental and South African tourism annual performance plans and allocated budgets for the 2018/19 financial year, the Committee made the following observations: Observations with regard to the National Department of Tourism The Committee made the following specific observations with regard to the National Department of Tourism 7.1 Budget allocation The National Treasury has allocated additional budget to Vote 33: Tourism, however, this is not commensurate with the socio economic benefits that could be derived from the well-funded sector vote.
The overall budget appropriation to Vote 33 has not fully taken into consideration increase budget allocations as advanced by the Committee to the Minister of Finance in the 2017 Budget Review and Recommendations Report.

The recommendations the to ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 201 Committee acknowledges the dire economic conditions in the country and the shrinking national purse.
It is also commended that Vote 33-Tourism is amongst the few that were allocated additional budgets in the MTEF.

However, the current Marketing Investment Framework has three scenarios developed to harness the full potential of the tourism sector in the country.
These are Scenario 1 - a budget increase of R240 million on air markets within the core focus areas, to achieve some maximum additional arrivals of 355 000 tourists; Scenario 2 - a budget increase of R2.6 billion to bring in 11 million extra passenger movements; and Scenario 3 - accommodation capacity requiring a budget increase of R850 million to fill 19.7 million graded rooms.
The response to the recommendation by the Minister of Finance to consider the Tourism Marketing Investment Framework developed by SA Tourism to appropriate additional budget for both international and domestic marketing activities is not satisfactory.

The Minister of Finance indicated that the Department of Tourism was given an additional funding of R239 million over the 2017 MTEF.
Allocations of R40 million in 208/19, R45 million in 2019/20, and R50 million in 2020/21 were made to take advantage of the opportunities identified in the Tourism Marketing Investment Framework.

The Committee had also recommended that the Minister of Finance appropriates additional budget to Vote 33 in order to capitalise the government owned tourism products to be ready for market and operations by emerging tourism entrepreneurs.
In addition, it was also recommended that the Minister of Finance capitalises the Transformation Fund to avail financial resources to expedite inclusive tourism economic growth.

In response, the Minister of Finance indicated that additional funding of R35 million in 2019/20 and R36.9 million in 2020/21 was provided to the Department of Tourism through the Economic Competitive and Support Package.
The funding is intended for business incentives for growth and job creation to incentivise priority areas, including providing market access support, tourism grading support, implementation of energy efficiency initiatives and funding transformation initiatives in the tourism sector towards unlocking capital investment by black business people.
With the current budget allocations, tourism remains underfunded and the current budget does not make the country competitive against other destinations which offer similar tourist experiences.

The sector transformation imperatives are being thwarted as the Tourism Transformation Fund will not increase in the next three years.

This requires that the future allocations to the tourism vote be carefully crafted.

The Committee will intensify its role in engaging various stakeholders in budget advocacy.
Tourism funding should ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 202 [Wednesday, 9 May 2018 involve a political decision-making and a lobby process, as all political parties serving in the Committee agree on the increase of sector funding.

More funding for tourism is also needed to keep South Africa on par with its counterparts.

The compelling economic case of tourism is forcing governments around the world to invest more on tourism.
The 8th Meeting of the Tourism Ministers of the G20 economies held in Buenos Aires in April 2018 agreed on considering the following: • Encouraging policies full and productive that promote employment and facilitate the progress of innovation in tourism and foster the creation of decent jobs, sustainable enterprises and entrepreneurship, in particular among women and the youth; • Establishing favourable frameworks to stimulate innovation, entrepreneurship and connect ecosystems linking start-ups, main companies, investors and governments along the tourism value chain; • Creating educational institutions at all levels, the private sector, governments and technology partners to review educational programmes and skills development policies cooperation mechanisms between • Considering the importance of SMEs in the tourism, heritage and cultural sectors due to their contribution to job creation as well as their role in preserving and promoting cultural resources; • Promoting the use of digital technology to facilitate travel as well as involving technology stakeholders in national tourism policies.
These and many other tourism focus areas should compel the National Treasury to fund tourism.

If South Africa remains underfunded, the sector will fail to compete at a global level and its contribution the Gross Domestic Product will diminish.

Consequently, the sector will fail to contribute to the socio-economic upliftment of the country through intensive labour absorption.
to 7.2 Communication strategy The Committee observed that the Communication Strategy of the Department has not worked well as communities are not fully aware of the bouquet of programmes offered by the department.

the Some communities have no department is offering and the department should improve in this regard.

The Committee acknowledges Izimbizo that are always held in different communities, but these are not enough.
idea whatsoever what ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 203 7.3 Volatile operating environment The Committee acknowledges that tourism is sensitive to a number of factors.

The department and South African Tourism operate in a high risk environment where socio-political, safety and security issues, and health concerns may affect the number of tourists coming to the country.
Currently, the country is experiencing listeriosis which has a potential to affect the marketing endeavours of SAT.

7.4 Master Plans It was noted with approval that the department will be conducting a master planning exercise for potential tourism sites throughout the country.

This master planning will create a blueprint for progressive development of many tourism sites in the country.
The Committee noted that this requires an agreement on the components of the Master Plans by various stakeholders, and that the three spheres of government should be committed in fulfilling their specific mandates to make this a success.

This will assist tourism development and driving transformation as the neglected tourism sites with a huge potential, such as Port St. Johns in the Eastern Cape province will now have a master plan to attract investors.
in enhancing inclusive 7.5 Improvements in project planning The Committee noted that the department has improved in project planning, a factor which has led to non-achievement of some pre-determined objectives in the previous financial years.

For the 2018/19 financial year, the department has already conducted all the advanced planning for all the planned projects to avoid unnecessary delays.

This includes the targeted number of the Full-Time Equivalent jobs which have always not been achieved.
7.6 Legislation, policy and strategy formulation to introduce The department had planned the Tourism Amendment Bill in the previous financial years but this did not materialise.

The Committee noted with concern that the 2018/19 Annual Performance Plan does not contain this target.

The Committee is concerned that the department is not taking the that are current disrupting the sharing the sector seriously.

In particular, economy is disrupting the accommodation sector but remains highly unregulated.
technological advancements trends and The delays in amending the Tourism Act also perpetuates the challenges faced by the grading scheme in the country as a ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 204 [Wednesday, 9 May 2018 policy decision needs to be made about the home of the Tourism Grading council and whether the scheme should remain voluntary or be made free but compulsory.
This in turn threats the destination image as such developments in the sector do not comply with technological advancements and quality assurance mechanisms implemented by the Tourism Grading Council of South Africa.

the 7.7 Tourism statistics The Committee remains concerned with the uncoordinated manner of collecting and collating the tourism statistics in the country.
For example, there are different methodologies used to measure domestic tourism and calculating the number of tourists that support the creation of one job but there is no standardised and universal agreement on the Department of Tourism has not facilitated a speedy resolution of these matters by South African Tourism.

This should be expedited to ensure credible tourism statistics that inspire confidence to investors.

this.
this.

The Ministry and 7.8 Ease of access is that South Africa long haul The Committee realises destination and that this is a deterrent to some potential tourists as the cost of coming to South Africa is too high.

Coupled with this is the continuous inconvenience caused by the immigration regulations and the Visa regime in South Africa.
The Committee notes that the Ministry and the Department are dealing with the ease of access, however, the continued inconvenience to tourists cost the country both in terms of tourist arrivals and contribution of the sector the Gross Domestic Product.

7.9 Tourism Transformation Fund The Committee was pleased that the department is continuing with implementing the Tourism Transformation Fund.
However, the Committee is not satisfied that the fund is only capitalised with R120 million for the next three years.

It is acknowledged that the funding comes from three streams, namely, government, Industrial development Corporation (IDC), and the National Empowerment Fund (NEF).

The Committee is of the opinion that the department should have provided more funding to unlock more collateral funding from other partners.
As it is, the fund is not enough to make a meaningful impact in the transformation of the sector that still strongly reflects the structural inequities of the past.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 205 7.10 Youth Employment Service the sector The Committee noted that the Youth Employment Service (YES) recently launched by the President of the country presents an opportunity for the meaningful and gainful employment.
The Committee realises that there are already partnerships with the private sector in a number of areas, including skills development.

This may be increased by developing an employment scheme anchored on the YES initiative.
to absorb more youth in Observations with regard to South African Tourism The following observations were made with regard to South African Tourism: 7.11 Implementation of the 5-in-5 strategy The Committee noted that the 2018/19 Annual Performance Plan tabled by SA Tourism is the continuation of the implementation of the 5-in-5 strategy (additional five million travellers constituted by four million more international tourists and one million extra local holiday trips).
The Committee noted with concern that SA Tourism has completed the first year of implementing this strategy and has already incurred a deficit of 614 000 tourists in year one.

This poses a threat to the achievement of the set targets of 5 million tourists in 5 years as there are no improved and innovative ways presented to the Committee to make up for the difference.
7.12 Domestic tourism to domestic The Committee observed with concern the growing trend of fewer South Africans travelling but spending more on domestic tourism as this points tourist becoming superficially and impressionistically an activity of the rich and affluent citizens only.

Domestic tourism is thus becoming a class activity and is not affordable to most South Africans.

The Committee was also concerned that SA Tourism continues to underperform with regard to domestic tourism.
The underperformance continues despite the ring-fenced budget and numerous campaigns such as Shot Left and We Do Tourism.

The Committee also noted with concern that SA Tourism does not understand the domestic consumer behaviour which might be an additional causal factor to poor performance.

SA Tourism should attend to these matters urgently to alter the downward trajectory of domestic tourism in the country.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 206 [Wednesday, 9 May 2018 7.13 Usage of consultants The Committee noted with concern that SA Tourism continues to use consultants in the execution of their daily activities, especially on IT related services.

Consultants will cost SA Tourism R25.7 million in the 2018/19 financial year.

The Committee is of the view that SA Tourism should in source this activity by employing young graduates with IT specialisation to do the work in-house.
This will not only reduce expenditure on consultants, but will also contribute to job creation.

7.14 The Tourism Grading Scheme The Committee observed with concern that the tourism grading scheme in South Africa seems to be failing.

The Tourism Grading Council of South Africa continues to struggle with improving the performance of the grading scheme.

There is a decline in the number of graded establishments as more businesses opt out of the system.
The private sector also does not see the value added by being graded as the ungraded establishments continue to operate illegally without consequences.

The Committee continues to call for the review of the grading scheme and to ensure quality assurance and good tourist experience in the country.

improved monitoring 7.15 TOMSA Levy The Committee appreciates the continued support by the private sector towards marketing South Africa through the TOMSA Levy.
It was observed with appreciation that the TOMSA Levy will increase from R130 million in 2018/19 to R144 million in 2020/2021.

However, concerns remain in the private sector about the optimum utilisation of this levy by SA Tourism.

The Committee noted the memorandum of Agreement between SA Tourism ad TOMSA on the implementation of the levy.

However, the Committee remains concerned about the voluntary nature of the levy collection and the number of levy collectors.
7.16 Homestays The Committee noted the emerging trend of Homestays around the country, with recent launch of the programme in Goedverwacht in the Western Cape.

The Committee noted that these kinds of initiatives do not feature prominently in the marketing campaigns for SA Tourism.

The Committee calls for the inclusion of such products in the marketing campaigns to promote rural tourism and geographic spread.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 7.17 Conversion 207 The Committee noted with concern the lost opportunity in the conversion of business tourists to leisure tourists.

The country hosts a number of events but there is no evidence that the Tourism Bureau of South Africa has managed to convert business delegates into leisure tourists.
The Committee calls for more delegate boosting activities to ensure that business delegates stay in South Africa for longer after the businesses events hosted in the country.

The Committee also calls for the intensification of the conversion initiatives of Visiting Friends and Relatives (VFR) tourists to leisure tourists.
The Committee noted with concern that SA Tourism still do not understand the role that VFR visitors play in conversion to holiday trips despite numerous calls by the Committee to do that.

7.18 Nordic markets The Committee noted that SA Tourism had indicated to the Committee that they were making inroads into the Nordic Markets and had ring-fenced a budget for those activities.

This initiative is important in increasing the market share for the country and more such initiatives are needed.
However, these should be accompanied by evidence of the return-on-investment.

7.19 Safety and security for tourists The Committee noted with concern the increase in safety and security incidents reported against tourists in South Africa.

These include crimes reported in and around OR Tambo International Airport, Table Mountain and elsewhere.

The Committee noted with concern the damning travel advisories issues by some source markets such as the Unites States of America, Australia and the United Kingdom.
These have a potential of affecting the industry.

This requires targeted responses to mitigate the negative impacts.

Urgent interventions are needed to mitigate the negative publicity, especially in source markets.

7.20 SME Support The Committee noted with endorsement the continued support given to emerging tourism enterprises by SA Tourism through the Hidden Gems programme.
However, the Committee was concerned that this programme is inadequate as it has not made an impact at the community and township level.

More support and visibility of SME programmes is needed for rural and township tourism emerging tourism enterprises.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 208 [Wednesday, 9 May 2018 8.
Recommendations Having made a number of observations based on the analysis of the Annual Performance Plans and Budgets for the 2018/19 financial year, the Committee recommends that the Minister of Tourism: Continues to engage the National Treasury on the increasing allocation of budget to the tourism vote and report back to the Committee on the progress before the Medium Term Budget Policy Statement (MTBPS) to be delivered in October 2018. legislation, policy, and strategy Improves on and prioritise formulation to keep up with the emerging trends in global tourism, including the regulation of the sharing economy in the sector.
Engages the Department to improve on its communication strategy, especially on programmes offered, to ensure a wide reach and more uptake by the target market.

Engages investors after the finalisation of the masterplans to ensure value for money on the budget spent and expedite transformation especially in neglected high potential community destinations.
Ensures that the department improves on project planning and implements the improvement plans, including advanced planning for all the projects implemented with external stakeholders.

Improves on the collection and collation of tourism statistics to ensure credible and useful measurement of the impact of tourism in the socio-economic landscape of South Africa.
Continues to engage the Minister of Home Affairs to improve the ease of access through tourist friendly immigration regulations and visa regime, including expediting the eVisa facilitation and report to the Committee on progress within six months of receiving this report.

Expedites transformation of the tourism sector by implementing pro poor programmes and capitalising the Tourism Transformation Fund to enable participation of previously marginalised communities.
8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9 Monitors the implementation of the 5-in-5 strategy to ensure increase in international arrivals and domestic trips.

8.10 Minimises the usage of consultants and contribute to job creation through employing the skilled youth to conduct the work currently commissioned to the consultants.

8.11 Consolidates activities meant to ensure safety and security for tourists and report quarterly to the Committee about progress made in this regard.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 209 8.12 Engages the Minister of Cooperative Government and Traditional Affairs with regard to tourism product development and marketing at local level.

8.13 Engages the Minister of Transport on accessibility of tourism in relation to the road conditions around the country, the airlift strategy, and signage of tourist attractions.

9.
9.

Conclusion The Committee is generally satisfied with the contents of the 2018/19 Annual Performance Plan of the National Department of Tourism and South African Tourism.

The plans are seamlessly aligned to the national priorities of government and address the core developmental principles of the tourism sector.

The efforts by the Department to achieve this alignment and continuing to provide sound leadership to the tourism development of the country is commendable.
The Committee is fully aware of the tremendous responsibility put on the department and South African Tourism to contribute to job creation and the Gross Domestic Product of the country.

The budget allocated to the tourism vote should thus be revisited for the sector to achieve its intended growth prospects and meaningful contribution to the country’s economy.
The Department can, however, still improve on a number of issues, including planning, policy formulation, enforcement of regulations, and communication strategy.

Improvements could also be made in stakeholder engagement and collaboration on a number of issues including a working relationship with all spheres of government, partnerships with the private sector and communities, better coordination with the airliners for improving airlift at a domestic and international level.
Report to be considered ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 210 [Wednesday, 9 May 2018 8.

REPORT OF THE PORTFOLIO COMMITTEE ON ENERGY ON THE BUDGET VOTE NO.

26 OF THE DEPARTMENT OF ENERGY, DATED 09 MAY 2018 1.

INTRODUCTION 1.1.

Subject of the report The subject of this report is to report back to the National Assembly (NA) on the Portfolio Committee on Energy's findings after evaluating and assessing the Budget Vote No 26 of the Department of Energy (08 May 2018).

1.2.
1.2.

Background Strategic Plans identify strategically important outcome orientated goals and objectives against which public institutions' medium-term results can be measured and evaluated by Parliament, provincial legislatures and the public.

Annual performance plans identify the performance indicators and targets that the institution will seek to achieve in the upcoming budget year.

The annual budget sets out what funds an institution is allocated to deliver services.
The Annual performance plan shows funded service-delivery targets or projections.

The annual budget indicates the resource envelope for the year ahead, and sets indicative future budgets over the medium term expenditure framework (MTEF).

The budget covers the current financial year and the following two years.
At the beginning of every year, the Minister of Finance tables before Parliament, amidst great expectation and anticipation by South Africans, a detailed outline of the State's Budget: how much money will be or ought to be spent, on what, in that financial year.
Thereafter, various government Departments present their budget votes before Parliament -specifying how they intend reconciling their resources with service delivery imperatives as outlined by the President of the ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 211 Republic of South Africa in the State of the Nation Address.

One of the main statutory functions of Parliament is to discuss, pass and oversee the State's Budget.

The Department of Energy's Budget (Vote No.


26) was referred to, for consideration and reporting.

In compliance with the referral by the National Assembly, the Committee held a Strategic Plan, Annual Performance Plan and Budget Vote briefing on 17 April 2018 with the Department of Energy (the Department) to consider its Annual Performance Plan, Budget Vote and Strategic Plan.
1.3 Objectives of the report The objectives of the report are as follows: • To describe and analyse the budget of the Department of Energy (DoE) over the 2018/19 financial year; • To conclude on implications and make recommendations thereto.

2.

STRATEGIC PLAN AND ANNUAL PERFORMANCE PLAN The core business of the Department is premised amongst others on the Energy White Paper of 1998 as well as the National Energy Act, 2008 (Act No.
34 of 2008) which, amongst others mandates the Department to ensure that diverse energy resources are available, in sustainable quantities and at affordable prices, to the South African economy in support of economic growth and poverty alleviation, while taking into account environmental management requirements and interactions amongst economic sectors.
In carrying out this mandate, the Department develops legislation; undertakes programmes and projects; and in some instances, transfer resources to various implementing agencies and state owned entities (SOEs).
The SOEs reporting to the DoE are as follows: ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 212 [Wednesday, 9 May 2018 Table 1: Entities Reporting to the Department Name of Public Entity Mandate Central Energy Fund (CEF) the acquisition of research South African Nuclear Energy Corporation (NECSA) National Nuclear Regulator (NNR) The NNR is established in terms of the National Nuclear Regulator Act, 1999 (Act No.

47 of 1999).
47 of 1999).

The Act establishes the regulator as a competent authority for nuclear regulation in South Africa.

The purpose of the NNR, as outlined in Section 5 of the National Nuclear Regulator Act, 1999 (Act No.

47 of 1999) is to essentially provide for the protection of persons, property & the environment against nuclear damage through the establishment of safety standards & regulatory practices.
into and To finance and promote exploitation of oil, gas and renewable/clean energy-related products and technology.

NECSA is established in terms of Section 3(1) of the Nuclear Energy the Act, 1999 (Act No.

46 of 1999).The Act provides for commercialisation of nuclear and related products and services, and delegates specific responsibilities to the corporation, including the implementation and execution of national safeguards and other international obligations.
The Nuclear Energy Policy of 2008 reinforced NECSA's mandate relating to Research and Development (R&D) and Nuclear Fuel Cycle (NFC) responsibilities.

NRWDI is a Nuclear Waste Disposal Institute established in terms of Section 3 of the National Radioactive Waste Disposal Institute Act, 2008 (Act No.

53 of 2008).The Act provides for the establishment of an NRWDI in order to manage radioactive waste disposal on a national basis and to provide for its functions and for how it is to be managed.
The Institute is not operational as yet.

NERSA is a regulatory authority established as a juristic person in terms of Section 3 of the National Energy Regulator Act, 2004 (Act No.

40 of 2004).

NERSA's mandate is to regulate the electricity, piped- gas and petroleum pipeline industries in terms of the Electricity Regulation Act, 2006 (Act No.

4 of 2006), Municipal Finance Management Act, 2003 (Act No.

56 of 2003), the Gas Act, 2001 (Act No.

48 of 2001) & the Petroleum Pipelines Act, 2003 (Act No.
60 of 2003).

SANEDI is an applied energy research institute established in terms of Section 7(1) of the National Energy Act, 2008 (Act No.

34 of 2008).

South African National Energy Development Institute (SANEDI) National Energy Regulator of South Africa (NERSA) National Radioactive Waste Disposal Institute (NRWDI) Source: DoE APP 2018/19 3.

ORGANISATIONAL ENVIRONMENT • Total No.

of Posts on DoE’s approved Organizational structure: 846 • Total No.
of Unfunded Posts: 225 - Funding of positions is based on budget allocation from National Treasury.

• Total No.

of Funded Posts: 621 o Filled Posts: 499 o Vacant Posts: 122 ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 213 • Total No.
of Additional posts: 46 • Interns: 25 • Permanent: 15 • Contracts: 6 Regarding Compensation of Employees (CoE), the budget is expected to increase at an average annual rate of 7.1 percent, from R333.2 million in 2017/18 to R409.2 million in 2020/21.

Despite the increase in the budget, the Department’s staff compliment is expected to decrease by 28 over the medium term, from 597 in 2017/18 to 567 in 2020/21.
However, the Department anticipates to fill critical posts at a senior management level in Energy Policy and Planning, Petroleum and Petroleum Products Regulation and Electrification and Energy Programme and Project Management programmes1.

4.
4.

PRIORITIES OF THE DEPARTMENT FOR 2018/19 FINANCIAL YEAR According to the APP for 2018/19, the Department will focus on the following key strategic areas, amongst others: 4.1 Legislation to be tabled in Parliament In the previous Parliamentary Term, fourth Parliament, the Department had an exhaustive list of legislation scheduled for submission to the Cabinet and Parliament.

However, to date, as the fifth Parliament is in its final year, none of the promised legislation has been tabled in Parliament.
Instead, the number of bills to be submitted to Parliament falls every year, without any explanation on what happened to the other legislative measure that had been planned for submission to Parliament in the previous years.

Whilst in the quarterly performance indicators there is a mention of progress in some of the legislation, the reality is that the target of the bills being tabled in Parliament has never been reached; instead, the dates are moved forward to a later quarter or year.
1 Ibid ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 214 [Wednesday, 9 May 2018 In the 2015/16 APP, the Department had indicated it would submit seven pieces of legislation to Parliament, the deadlines of were mainly the end of March 2016 and the end of March 2017.

The seven legislative measures2 comprised the following: 1.
Electricity Industry Structure Bill: The aim of the Bill is to encourage increased investment in electricity generation to enable the country to meet the required electricity supply capacity needed for economic growth.

2.

Electricity Regulation Amendment Bill (to amend the Electricity Regulation Act, 2006 [Act No.

4 of 2006], as amended): the purpose of the Bill is to provide a regulatory framework that promotes Independent Power Producer (IPP) participation.

3.
3.

Energy Regulator Amendment Bill (to amend the National Energy Regulator Act, 2004 [Act No.

40 of 2004]): The Bill aims to promote efficient regulation of the energy sector.

4.

Promulgated National Nuclear Regulator Amendment Act: The aim is to review and update existing legislation, taking into consideration the current developments.

5.

Nuclear Energy Act Amendment Bill: The purpose of the Bill is to review and update existing legislation, taking into consideration the current developments.

6.
6.

National Radioactive Waste Management Fund Bill: The Bill aims to ensure the existence of the funding mechanism for radioactive waste management.

2 DoE Annual Performance Plan, (2015/16) ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 215 7.

Develop Strategic Fuel Fund (SFF) Bill: The purpose of the Bill is to establish a national petroleum reserve organisation to manage the strategic stock of petroleum and gas.
Of the seven bills, only two were carried over into the next financial year (2017/18).

These were the National Energy Regulator Amendment Bill and the Electricity Regulation Amendment Bill.

In the APP, there was no explanation on the rationale for only two bills instead of seven being accounted for.
In the current financial year APP (2018/19), there are two Bills planned to be submitted to Cabinet before the end of the financial year and these are the National Energy Regulator Amendment Bill and the Gas Amendment Bill.

4.2 Integrated National Electrification Programme (INEP) Compared to other countries in sub-Saharan Africa, South Africa has made tremendous progress in terms of electrification.
This could be attributed to the National Electrification Programme that the South African government embarked on after 1994.

Through this programme, the level of household electrification increased from 36 per cent in 1994 to 86 per cent in 2018, with over 7.2 million households having been electrified under the programme3, a significant milestone for South Africa and unprecedented internationally.
Through the programme, the government further aims to electrify 97 per cent of households by 2025 through grid and off-grid solutions.

In recent years, grid connection rates have substantially declined4.
Some of the reasons for this is given below: • Significant bulk electricity generation capacity constraints; • Electrification spending being used to fund not only electricity connections as in the past, but also upgrades of an ageing network backbone infrastructure, resulting in a lower share of available funds being targeted for new electricity connections; 3 Department of Energy, (2018) 4 Sustainable Energy Africa, (2014) ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 216 • [Wednesday, 9 May 2018 Increasing growth in the number of new households, with the backlogs and new developments that need to be serviced, and the associated increased costs to electrify poor urban households typically located on the margins of the urban areas and in remote rural areas; • Municipalities experiencing enormous capacity challenges with regard to availability of planning and technical personnel to undertake the electrification within their jurisdictions; and • The ongoing rural, urban migration arising from historic spatial inequalities increasing pressure on already constrained power supplies in the urban areas.
For the 2018/19 financial year, the Department aims to deliver 200 000 connections through grid and 20 000 through non-grid technologies.

In the previous financial year, the Department had committed to deliver 235 000 grid connections and 15 000 through non-grid by the end of March 2018.

When reporting on its 2017/18 third quarter report to the Portfolio Committee on Energy, the Department indicated that the aforementioned targets are likely to be achieved5.
Whilst the budget for this programme has been reduced due to tight fiscal financial constraints by almost 13 percent, in real terms, the Department has committed to ensuring that the target of electrifying 1.25 million households by the end of 2019 is realised6.

4.3 Integrated Energy Plan (IEP) and the Integrated Resource Plan (IRP) The development of a National Integrated Energy Plan (IEP) is envisaged in the White Paper on the Energy Policy of the Republic of South Africa of 1998.
In terms of the National Energy Act, 2008 (Act No.

34 of 2008), the Minister of Energy is mandated to develop and, on an annual basis, review and publish the IEP in the Government Gazette.
Thus, the purpose and 5 Department of Energy 2017/18 Third Quarter Presentation (2018) 6 Department of Energy, (2018) ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 217 objectives of the IEP are anchored in the National Energy Act, which requires the IEP to have a planning horizon of no less than 20 years.
As a long-term plan, the IEP is intended to provide a roadmap of the future energy landscape for South Africa which guides future energy infrastructure investments and policy development.

The Draft IEP has been developed by the DoE and an update thereof was presented to the Portfolio Committee on Energy on the 14th of February 2017.

It is important to note that the current draft IEP has been under development for several years.
The first Draft Report was presented to the Portfolio Committee on Energy on 20 August 2013.

At the time, the Department indicated that the required stakeholder consultation would take four months and the policy be finalised in six months.

Thus, the finalised policy should have been completed in November 2014.7 However, to date, the IEP has not been finalised.

According to the Department, the Plan will be finalised during the current financial year.
As alluded to above, the IEP is an overarching energy policy – this means that following its finalisation, sector specific plans which seek to implement what is envisioned in the IEP must be developed.

These plans include the Integrated Resources Plan (IRP).

The future development of the IRP draws its mandate from the Electricity Regulations for New Generation Capacity, promulgated by the DoE on 5 August 2009.
Although the regulations refer to resource planning, it should be clear that this is only about electricity planning.

The IRP is a process by which the requirement for investment in generation capacity for South Africa is determined.

It aims to provide an indication of the country’s electricity demand, how this demand will be supplied and what it will cost.

The IRP 2010-30 was promulgated in March 2011.


It was indicated at the time that the IRP should be a “living plan” which would be revised by the DoE every two years.

This would mean that by March 2013 there should have been a new iteration of the plan.

However, this was delayed due to a number of challenges – the argument from the Department at the time was that the IEP had to be finalised before the IRP.
However, it seems, somehow, this argument had changed as 7 Department of Energy, (2013) ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 218 [Wednesday, 9 May 2018 Cabinet hastily adopted the IRP in December 2017.

When briefing the Committee in February 2018, the Department had indicated that whilst the Cabinet adopted the IRP, it also raised concerns, hence the revised Plan has not been publicised.
The Department further stated that the IRP would be sent back to Cabinet for reprocessing by the new Cabinet.

4.4 Renewable Energy Independent Power Producer Procurement Programme According to the current official Integrated Resource Plan for electricity, by 2030, 42 per cent or 17.8 gigawatts (GW) of new generation capacity should come from renewable energy.8 To deliver on this, the DoE launched bidding windows under its Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
To date, in four separate Ministerial determinations, the Energy Minister has determined that 14 725 megawatts (MW) of renewable energy capacity be procured, drawing on onshore wind, solar photovoltaic (PV), concentrated solar power (CSP), biogas, biomass, landfill gas and small hydro.

The renewable energy programme has been regarded as one best in the world.

However, the programme experienced a number of challenges in the past three years.
Amongst the challenges, key was Eskom refusing to sign Power Purchase Agreements (PPA) with 27 Independent Power Producers (IPP).

It is with great relief that the 27 projects have since been signed.

The signed IPP projects will contribute R9.8 billion to socioeconomic development initiatives and R3.39 billion to enterprise development over the 20-year life of the projects9.
4.5 Solar Water Heater Programme For the past four years, the Portfolio Committee on Energy has been raising concerns about the slow pace in the implementation of the National Solar Water Heating Programme (NSWHP).

Initially, the Programme had a target 8 Department of Energy, (2011) 9 Engineering News, (2018) ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 219 of installing 1 million solar water heaters (SWHs) by 2014.
However, the programme has installed just over 400 000 units so far – meaning the target was not realised.

Despite the failure to meet the 1 million target, the current administration has set a cumulative target of 1,75 million SWH installations by 2019 and further established a long-term target through the National Development Plan (a cumulative target of 5 million solar water heaters by 2030).
In an effort to address the slow pace in implementing the programme, a new contracting model was devised and was approved by Cabinet.

The original programme was managed by Eskom and was targeted at private and commercial installations that already had geysers and electricity, with the aim of reducing the demand by electric geysers on the grid (load reduction programme).

The incentive used was a subsidy on the purchase price of installed SWHs, based on the reduction in peak demand and energy achieved.
An additional programme of replacement of failed electric geysers with solar water heating system was implemented by the short-term insurance industry.

The rollout of low-pressure heaters (the social programme) was handled by municipalities, supported by Eskom, with full subsidies.

Eskom ceased to be involved in the programme and officially handed it over to the DoE in May 2015, as its prime business was the generation and distribution of electricity, not solar water heaters.
The new programme is managed by the DoE and it is separated into Supply and Installation programmes.

According to the Department, there has been great progress made with implementation of the Supply Programme.

Since the programme has been moved back from Eskom, over 80 000 units have been manufactured10, however, there is no progress on installation.

The Department has taken a decision to move the installation phase of the programme to the Central Energy Fund (CEF) and IPP Office11.
10 Department of Energy, (2018) 11 Ibid ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 220 [Wednesday, 9 May 2018 4.6 Petroleum Industry Regarding the petroleum sector, the Department will continue to monitor compliance with the Liquid Fuels Charter commitment, which requires that historically disadvantaged South Africans own 25 per cent of the aggregate value of the equity of the entities that hold the operating assets in the South African Oil industry.
The sector remains largely untransformed, especially in the retail sector12.

To this end, the Department commissioned an independent audit to confirm the extent of transformation in the petroleum retail sector13.

The aim of the audit is to provide a baseline in the alignment of Petroleum and Liquid Fuels Charter with the national the Broad Based framework14.
Black Economic Empowerment (B-BBEE) policy Furthermore, the Department is developing the petroleum sector codes, to ensure monitoring, evaluation, reporting and enforcement.

Pertaining to the country’s refining capacity; the national demand for petroleum products outstrips supply from domestic refineries.

Although the country has six refineries, four of which are crude oil refineries, the country imports an increasing share of refined products15.
As a result, in 2015 there was a steep increase in the amounts of diesel and petroleum imported into the country.

The National Development Plan (NDP) anticipated that by 2017 a decision would be made on building a new refinery.

In line with the NDP, the Department, in the previous financial year had indicated that it would make recommendations and proposals regarding the refining capacity in South Africa.

To date, a decision has not been made on the expansion of the refining capacity.
In the current APP, the Department states that it will “…soon make a policy decision regarding the refining capacity of the country, especially as we move towards Cleaner Fuels II”16.

Whist a decision has not been made; there is a general view that there is a need for a new refining capacity for South Africa.
12 Department of Energy, (2018) 13 Ibid 14 Ibid 15 Ibid 16 Ibid ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 221 4.7 Regional Integration and Energy Cooperation According to the APP, the Department will continue to maintain cooperation with the Southern African Development Community (SADC) region, the Africa continent and the rest of the world.
These strategic partnerships are in line with the energy interest of the country, particularly the need for energy security of supply, diversification of energy mix, and access to finance, technology, technical skills and energy information.

In line with this imperative, the DoE has forged bilateral and multilateral relations that meet the DoE’s strategic objectives.
During the current financial year, South Africa assumes the Chairship of BRICS, with the DoE leading the work in the energy sector, and specifically hosting the Third BRICS Energy Ministers meeting and the meeting of the BRICS Working Group on Energy Saving and Improvement of Energy Efficiency17.

Furthermore, the 2018 SADC Summit is also under the Chairship of South Africa.
A number of sectoral meetings and engagements will precede the Summit, with the DoE hosting the meeting of the SADC Energy Ministers during June 201818.

One of the deliverables during South Africa’s Chairship of SADC will be the development of the Regional Gasification Strategy and Plan.

South Africa will work with the SADC secretariat.


During the year under review, the Department will also work with the relevant SADC member states towards concluding and signing of the Inter-governmental Memorandum of Understanding (IGMoU) and Inter-utility Memorandum of Understanding (IUMoU) on the Inga III transmission line for the transmission of power from the Inga III Hydropower Project with the Democratic Republic of Congo (DRC)19.
17 Ibid 18 Ibid 19 Ibid ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 222 [Wednesday, 9 May 2018 5.

BUDGET OF THE DEPARTMENT OF ENERGY (2018/19) This section provides analysis of the overall budget allocation for the DoE for the 2018/19 financial year.
Table 2: Overall Budget of the Department of Energy Programme Budget R million Administration Energy Policy & Planning Petroleum & Petroleum Products Regulation Electrification & Energy Programme & Project Management Nuclear Energy Clean Energy TOTAL Nominal Increase / Decrease in 2018/19 19,0 6,4 Real Increase / Decrease in 2018/19 4,3 3,6 Nominal Percent change in 2018/19 7,21 % 13,70 % Real Percent change in 2018/19 1,62 % 7,78 % 2017/18 263,6 46,7 2018/19 282,6 53,1 81,8 87,1 5,3 0,8 6,48 % 0,93 % 6 220,0 790,9 742,5 8 145,4 5 435,4 816,6 370,2 7 045,0 - 784,6 25,7 - 372,3 - 1 100,4 - 1 068,0 - 16,9 - 391,6 - 1 467,7 -12,61 % 3,25 % -50,14 % -13,5 % -17,17 % -2,13 % -52,74 % -18,02 % Source: National Treasury, (2018) & Research Unit Own Calculations As evident in the above table, the overall budget of the DoE has decreased by R1.467 billion, from R8.1 billion in 2017/18 to R7 billion in 2018/19.
This means the Department’s budget has decreased by 18 percent, in real terms.

The reductions of R1.4 billion were approved by Cabinet for the 2018/19 financial year.

The reductions are mainly on the Electrification and Energy Programme and Project Management, the Department’s largest programme, which account for almost 77 percent of the projected budget over the medium term20.

There is a substantial decrease on the clean energy programme, a decrease of over 50 percent.
The biggest increase is in the Energy Policy and Planning programme, an increase of almost 8 percent, in real terms.

The details on the decrease or increase in programmes will be discussed in the subsequent section.

20 National Treasury, (2018) ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 20 18] 223 The above Chart show ws the percentage change, such as increase or decrease in budget allocation p per programme for the 2018/19 financial y year.
The percentage is in nomin nal terms, meaning inflation is not taken into o account.

As can been seen, the Clean Energy Programme budget allocation d decreased by 50 percent, Ele ectrification and Energy Programme and d Project Management decreas sed by almost 13 percent.
Allocations for the Administration progra amme increased by 7 percent, Energy Po olicy and Planning increased by y almost 14 percent, Nuclear Energy by 3 percent, whilst the Petroleum m and Petroleum Products Regulation incre eased by 6 percent.
5.1 Programme A Analysis As indicated in the pr receding section, the Department has six pro ogramme areas, namely - Admin nistration; Energy Policy and Planning; Petro leum and Petroleum Products R Regulation; Electricity and Energy Program mme and Project Management; ; Nuclear Energy; and Clean Energy.

It t is also noteworthy that these departmental programmes have their respec ctive sub- programmes as well.
5.1.1 Program mme 1: Administration The aim of this progr amme is to provide strategic leadership, man nagement and support services to o the Department.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS A NO 57─2018 224 [Wednesday, 9 May 2018 Table 3: Programme1: Administration Programme Budget Nominal Increase / Decrease in 2018/19 - 6,0 Real Increase / Decrease in 2018/19 - 7,7 Nominal Percent change in 2018/19 Real Percent change in 2018/19 -15,27 % -19,68 % 2017/18 39,3 2018/19 33,3 63,6 73,2 9,6 5,8 15,09 % 9,09 % 36,1 6,1 82,8 39,3 8,5 79,2 3,2 2,4 - 3,6 1,2 2,0 - 7,7 49,2 282,6 Source: National Treasury, (2018) & Research Unit Own Calculations 35,8 263,6 13,4 19,0 10,8 4,3 8,86 % 39,34 % -4,35 % 37,43 % 7,2 % 3,19 % 32,08 % -9,33 % 30,27 % 1,62 % R million Ministry Departmental Management Finance Administration Audit Services Corporate Services Office Accommodation TOTAL The budget for this programme increased from R263.6 million in 2017/18 to R282.6 million in 2018/19.
This translates into a budget increase of 7 percent in nominal terms, however, in real terms, the budget increases by only 2 percent.

The above table illustrates that the largest chunk of the budget, although it has decreased by 4 percent in real terms, is allocated to Corporate Services, followed by Departmental Management and Office Accommodation.

Allocation for Departmental Management increased by 15 percent in nominal terms, whilst Office Accommodation increased by 37 percent in normal terms.
5.1.2 Programme 2: Energy Policy and Planning This programme aims to ensure evidence-based planning, policy setting and investment decisions in the energy sector to improve the security of energy supply, regulation and competition.
Table 4 : Programme 2: Energy Policy and Planning Nominal Increase / Decrease in 2018/19 Real Increase / Decrease in 2018/19 0,1 2,9 2,4 0,0 1,6 1,6 Nominal Percent change in 2018/19 4,00 % 12,78 % 18,75 % Real Percent change in 2018/19 -1,42 % 6,90 % 12,56 % 2017/18 2018/19 2,6 25,6 15,2 2,5 22,7 12,8 Programme Budget R million Policy Analysis & Research Energy Planning Hydrocarbon Policy Electricity, Energy Efficiency & Environmental Policy TOTAL 0,6 3,6 Source: National Treasury, (2018) & Research Unit Own Calculations 9,7 53,1 8,6 46,7 1,1 6,4 12,79 % 13,7 % 6,91 % 7,78 % ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 225 The budget for this programme has increased from R46.7 million in 2017/18 to R53.1 million in 2018/19.
In normal terms, this represents a budget increase of almost 14 percent.

However, when considering inflation, the budget increases by almost 8 percent.

The increase is mainly noticeable in three sub-programmes, namely, Energy Planning – an increase of 7 percent in real terms, Hydrocarbon Policy – an increase of almost 13 percent in real terms, Electricity, Energy Efficiency and Environmental Policy – an increase of 7 percent in real terms.
On the other hand, allocation for Policy Analysis and Research decreased by 1 percent in real terms.

5.1.3 Programme 3: Petroleum and Petroleum Products Regulation This programme regulates the petroleum and petroleum products industry, to ensure the optimal and orderly functioning of the industry to achieve government’s development goals.
Table 5: Programme 3: Petroleum and Petroleum Products Regulation Budget 2017/18 2018/19 Nominal Increase / Decrease in 2018/19 Real Increase / Decrease in 2018/19 Nominal Percent change in 2018/19 Real Percent change in 2018/19 12,7 18,6 26,9 8,5 27,4 6,2 5,9 0,5 - 2,3 4,9 46,46 % 38,82 % - 0,9 - 2,6 1,86 % -27,06 % -3,45 % -30,86 % - 0,5 R 0,8 Source: National Treasury, (2018) & Research Unit Own Calculations 33,7 R 81,8 1,3 R 5,3 35,0 87,1 3,86 % 6,5 % -1,56 % 0,93 % Programme R million Petroleum Compliance, Monitoring & Enforcement Petroleum Licensing & Fuel Supply Fuel Pricing Regional Petroleum Regulation Offices TOTAL When compared to the previous financial year, budget for this programme has increased by 6.5 percent in nominal terms, from R81.8 million in 2017/18 to R87.1 million in 2018/19.
However, when considering inflation, the budget increases by only 0.9 percent.

One programme shows a noticeable increase, both in real and nominal terms.

This relates to the Petroleum Compliance, Monitoring and Enforcement – an increase of 38 percent in real terms.

On the other hand, allocation for the sub- programme Fuel Pricing has decreased substantially, a decrease of 30 percent in real terms.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 226 [Wednesday, 9 May 2018 5.1.4 Programme 4: Electrification and Programme and Project Management The aim of this programme is to manage, coordinate and monitor programmes and projects that are focused on access to energy.
Table 6 : Programme 4: Electrification Programme Budget Nominal Increase / Decrease in 2018/19 Real Increase / Decrease in 2018/19 Nominal Percent change in 2018/19 Real Percent change in 2018/19 2017/18 2018/19 6 177,7 16,6 5 392,5 18,1 - 785,2 1,5 - 1 066,3 0,6 -12,71 % 9,04 % -17,26 % 3,35 % 11,3 11,4 0,1 - 0,5 0,88 % -4,37 % 7,7 8,1 0,4 0,0 5,19 % -0,29 % 6,7 6 220,0 5,3 5 435,4 - 1,4 - 784,6 - 1,7 - 1 068,0 -20,90 % -12,6 % -25,02 % -17,17 % R million Integrated National Electrification Programme Energy Regional Offices Programme & Project Management Office Electricity Infrastructure/Industry Transformation Community Uplifment Programmes & Projects TOTAL Source: National Treasury, (2018) & Research Unit Own Calculations The bulk of the DoE’s budget, over the years, has been allocated mainly for this programme.
This is currently still the case.

The budget for this programme decreased from R6.2 billion in 2017/18 to R5.4 billion in 2018/19.

This represents a decrease of 13 percent in nominal terms, whilst in real terms, the budget decreases by 17 percent.

There is a substantial budget decrease in two sub-programmes, namely, the Integrated National Electrification Programme (INEP)– a decrease of 17 percent in real terms, and the Community Upliftment Programme – a decrease of 25 percent in real terms.
The only budget increase is on allocation for the Regional Offices – an increase of 9 percent in nominal terms, whilst in real terms the budget increases by 3 percent.

5.1.5 Programme 5: Nuclear Energy The programme manages the South African nuclear energy industry and controls nuclear materials in terms of international obligations, nuclear legislation and policies to ensure the peaceful use of nuclear energy.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 227 Table 7: Programme 5: Nuclear Energy Budget Programme R million Nuclear Safety &Technology Nuclear Non-Proliferation & Radiation Security Nuclear Policy TOTAL 2017/18 2018/19 796,2 770,7 9,3 10,9 790,9 9,1 11,4 816,6 Nominal Increase / Decrease in 2018/19 Real Increase / Decrease in 2018/19 Nominal Percent change in 2018/19 Real Percent change in 2018/19 25,5 - 16,0 3,31 % -2,08 % - 0,2 0,5 25,7 - 0,7 - 0,1 - 16,9 -2,15 % 4,59 % 3,2 % -7,25 % -0,87 % -2,13 % Source: National Treasury, (2018) & Research Unit Own Calculations The budget for this programme has increased from R790.9 million in 2017/18 to R816.6 million in 208/19.
This represents an increase of 3,2 percent in nominal terms, but when inflation is considered, the budget shows a decrease of 2 percent in real terms.

The biggest decrease is in the Nuclear Non-Proliferation and Radiation Security sub-programme – a decrease of 7 percent in real terms.
5.1.6 Programme 6: Clean Energy The aim of this programme is to manage and facilitate the development and implementation of clean and renewable energy initiatives, as well as energy efficiency and demand-side management initiatives.
Table 8 : Programme 6: Clean Energy Budget 2017/18 2018/19 285,7 75,8 668,7 65,8 Nominal Increase / Decrease in 2018/19 - 383,0 10,0 Real Increase / Decrease in 2018/19 - 397,9 6,0 Nominal Percent change in 2018/19 -57,28 % 15,20 % Real Percent change in 2018/19 -59,50 % 9,19 % Programme R million Energy Efficiency Renewable Energy Climate Change & Designated National Authority TOTAL 0,1 8,7 - 391,6 370,2 Source: National Treasury, (2018) & Research Unit Own Calculations 0,6 - 372,3 8,1 742,5 7,41 % -50,1 % 1,81 % -52,74 % Of all the programmes, this programme has seen the biggest decrease in budget allocation, a decrease of over 50 percent.
The decrease is mainly the Energy Efficiency sub-programme, a decrease of over 57 percent.
The Energy Efficiency sub-programme advances energy efficiency in South ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 228 [Wednesday, 9 May 2018 Africa by planning and coordinating initiatives and interventions that are focused on developing and improving the energy efficiency market, and ensures the integration and coordination of energy efficiency initiatives and interventions with relevant associated institutions.
This sub-programme also make transfers in respect of the solar water heater projects – hence the substantial reduction in budget allocation.

5.2 Economic Classification This section provides a summary of the Medium Term Expenditure Framework (MTEF) for the Economic Classification aspect of the budget.
Table 9: MTEF Allocation and Indicative Baselines Economic Classification 2018/19 2019/20 2020/21 ENE Allocation Indicative Baseline Indicative Baseline R million Compensation of Employees Goods and Services Transfers and Subsidies Payments for Capital Assets TOTAL R'000 360,517 252,306 6,427,655 4,539 7,045,017 384,278 272,098 6,912,485 4,785 7,573,646 409,249 296,882 7,286,426 5,048 7,997,605 Source: DoE Presentation to PCE – 17 April 2018 Total Budget 1,154,044 821,286 20,626,566 14,372 22,616,268 Regarding Compensation of employees, the budget is expected to increase at an average annual rate of 7.1 percent, from R333.2 million in 2017/18 to R409.2 million in 2020/21.
Despite the increase in budget, the Department’s staff compliment is expected to decrease by 28 over the medium term, from 597 in 2017/18 to 567 in 2020/21.

However, the Department anticipates to fill critical posts at a senior management level in Energy Policy and Planning, Petroleum and Petroleum Products Regulation and Electrification and Energy Programme and Project Management programmes21.
On Goods and Services, the budget is expected to increase at an average annual rate of 7.4 percent over the medium term from R239.4 million in 2017/18 to R296.9 million in 2020/21.
The expenditure mainly comprises 21 Ibid ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 229 servicing operating leases at the Department’s regional offices which were relocated, costs related to the inspection of 4 500 petroleum retail sites, and the solar water heater programme over the medium term22.
Table 10: Transfer payments Entity / Project Rand million Households SETAs 2017/18 ENE Allocation R’000 454 1,108 2018/19 ENE Baseline R’000 480 1,170 2019/20 ENE Baseline R’000 507 1,234 International Membership fees 27,915 Programme 4: INEP Non-Grid Programme 4: INEP Eskom Programme 4: INEP Municipalities Programme 5: NECSA Programme 5: NNR Programme 5: NRWDI Programme 6: SANEDI Programme 6: SWHP Programme 6: EEDSM: Municipalities Total 201,649 3,262,031 1,904,477 682,714 16,510 45,532 70,241 - 215,024 6,427,655 29,478 212,941 3,432,453 2,127,928 720,224 43,096 43,499 74,151 - 227,065 6,912,485 31,099 224,653 3,621,488 2,244,964 759,851 45,467 39,397 78,215 - 239,554 7,286,429 Source: DoE presentation to PCE – 17 April 2018 6.
OBSERVATIONS AND FINDINGS • The budget of the Department has been reduced by R1.1 billion or 13 percent when compared to the previous financial year.

For the 2017/18 financial year, the Department was allocated R8.1 billion and in 2018/19, the budget is reduced to R7.045 billion.

This will have an impact on the filling of the vacant posts, thus affecting the ability of the Department to execute its mandate effectively.
Whilst the budget has been reduced, the compensation of employees budget has increased by almost 9 percent, in line with adjustments related to inflation.

The Department indicated that the process of filling critical vacant posts is underway.

The Minister of Energy indicated that the shortlisting of Deputy Director-General positions will be done during the week of the 14th of May 2018.
22 Ibid ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 230 [Wednesday, 9 May 2018 • Of all the six programmes of the Department, the Clean Energy Programme has seen the biggest decrease in budget allocation, a decrease of over 50 percent.

The decrease is mainly in the Energy Efficiency sub-programme, a decrease of over 57 percent.
The Energy Efficiency sub-programme advances energy efficiency in South Africa by planning and coordinating initiatives and interventions that are focused on developing and improving the energy efficiency market, and ensures the integration and coordination of energy efficiency initiatives and interventions with relevant associated institutions.

This sub- programme also makes transfers in respect of the solar water heater projects – hence the substantial reduction in budget allocation.
The Committee was concerned about this significant cut in budget in light of the fact that the Department has a vision of improving the country’s energy mix by having 30 percent of clean energy by 2025.
According to the Department, funding for the Clean Energy Programme is not only dependent on the DoE, funding is sourced from various areas such as international donors, sponsorships, Development Bank of South Africa (DBSA), Independent Power Producer (IPP) Office – income generated from the bidding process, etc.

• The Committee was concerned about the increase in budget for the Nuclear Energy Programme.

The budget for the programme increased from R790.1 million in 2017/18 to R816.6 in 2018/19.
This represents an increase of 3.2 percent in nominal terms.

The budget for consultants and advisory services increased from R10.8 million in 2017/18 to R21.1 in 2018/19.

The Department stated that the increase is for the coordination of nuclear activities, not necessarily for the New Nuclear Build Programme (NNBP).
Coordination referred to includes activities relating to the Western Cape High Court judgement on the processes followed regarding the NNBP, areas that deal with South African Nuclear Energy Corporation (NECSA), the National Nuclear Regulator (NNR) and Eskom (Koeberg Nuclear Plant).
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 231 • The Department is not faring well in executing its mandate or the purpose it was created for, which is to “…formulate energy policies, regulatory framework and legislation”, amongst others.

In the fourth Parliament, the Department had planned to table legislation in Parliament and deadlines were missed.
Similarly, in the fifth Parliament, most deadlines for submission of legislation to Parliament have passed; it is very unlikely that the Fifth Parliament will process any of the long outstanding legislation.

• As with the delays in the submission of Bills to Parliament, the same could be argued on the poor performance of the Department in finalising critical energy policies.

For instance, the Integrated Resource Plan and Integrated Energy Plan are long overdue.
These policies are key in the energy sector; they provide direction for the energy sector and all the many industries that rely on energy availability for their own planning.

The Minister indicated that the IRP will be financed by August 2018.

• Whilst the impasse between Eskom and the IPPs has been resolved, there needs to be a regulatory framework or legislation, which permanently addresses the participation of IPPs in electricity generation.
Thus, the Department should expedite the finalisation of the Electricity Regulation Amendment Bill.

As stated above, the Bill aims to provide a regulatory framework that promotes IPP participation.

• The Committee is concerned about the poor performance of the National Solar Water Heater programme.

Initially, the programme had a target of installing 1 million solar water heaters (SWHs) by 2014.

However, the programme has installed just over 400 000 units so far – meaning the target was not realised.
Despite the failure to meet the 1 million target, the current administration has set a cumulative target of 1,75 million SWH installations by 2019 and further established a long-term target through the National Development Plan (a cumulative target of 5 million solar water heaters by 2030).
In light of the implementation challenges experienced thus far, the Committee is of the view that reaching the ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 232 [Wednesday, 9 May 2018 set target is not possible.

The Department has manufactured 80 000 solar water heaters to date.

The next phase, which is proving to be difficult, is the installation phase.

This phase requires partnership with the municipalities – thus a municipal resolution.
The Department stated that municipalities derive their revenue from electricity, thus installing solar water heaters for its customers is not beneficial to them.

It seems the Department does not have a clear strategy on how to implement the programme.

In the APP, the Department states that the installation phase of the programme will be moved to the Central Energy Fund (CEF) and the IPP Office.
• Despite the challenges PetroSA faces, the Minister indicated that Government is committed to making the entity sustainable as an oil and gas company for the country.

• On the Grand Inga Project, the Department indicated that the project is not progressing fast as anticipated due to internal challenges within the Democratic Republic of Congo (DRC).

Therefore, the DoE can move as fast as its partners move.

7.
7.

CONCLUSION The Portfolio Committee on Energy will continue to fulfil its Constitutional mandate.

It is guided by the Parliamentary rules in conducting the oversight on the functioning of the Department of Energy.

This is done to ensure proper and effective functioning and compliance with the legislation and policy requirements.

8.
8.

RECOMMENDATIONS Having considered the Budget Vote of the Department of Energy, the Portfolio Committee on Energy recommends that the House support the Budget Vote 26: Energy and further recommends that, ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 233 The Minister of Energy, within the current financial year: 1.
Update the Committee on the Solar Water Heater Implementation Plan, including transfer of the installation phase to the Central Energy Fund, in the 4th Quarter of 2018/2019.

2.

Once the judgement on the investigation into the sale of strategic fuel stock has been passed, update the Committee.

3.

Present to the Committee the finalised Integrated Resource Plan (IRP), in the 4th Quarter of 2018/19.

4.

Present the end-state of electricity report to the Committee, in the 4th Quarter of 2018/19.

5.
5.

Regarding the Grand Inga Project, update the Committee on the Intergovernmental Memorandum of Understanding (IGMoU) with transit countries, in the 4th Quarter of 2018/19.

6.

Update the Committee on the Nuclear New Build Programme, in the 4th Quarter of 2018/19.

7.

Update the Committee on the filling of vacant posts, including vacant posts in State Owned Entities, in the 3rd Quarter of 2018/19.

8.
8.

Submit and present the Inter-Ministerial Task Team Report on the Electricity Distribution Industry, in the 3rd Quarter of 2018/19.

9.

Update the Committee on the restructuring on the Central Energy Fund, in the 3rd Quarter of 2018/19.

10.

Update the Committee on Eskom governance challenges and the status of the coal power stations, in the 3rd Quarter of 2018/19.

11.

Update the Committee on the decision to build a new refinery, in the 3rd Quarter of 2018/19.

Report to be considered.


ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 234 [Wednesday, 9 May 2018 9.

Report of the Portfolio Committee on Labour on Budget Vote 28: Labour, and on the Strategic Plans of the Department of Labour and its entities 2018/19, dated 9 May 2018 Having considered the briefings on the budget reviews of the Department and its entities in line with its 2018/19 strategic plans which were presented on 25 April 2018, the Committee recommends as follows: 1.
Introduction The Department of Labour derives its legislative mandate from the Constitution, particularly the Bill of Rights, which is given effect through a number of acts that regulate labour matters in South Africa.

The most important of these are the Labour Relations Act (1995), the Basic Conditions of Employment Act (1997), the Employment Equity Act (1998), the Occupational Health and Safety Act (1993), and the Employment Services Act (2014).
The challenges facing South Africa's labour market have been evident in a number of recent judgements and in a variety of ongoing processes of engagement between social partners.

Following extensive deliberations on the introduction of the National Minimum Wage (NMW), the social partners, on 7 February 2017, tabled the agreement which was to be implemented not later than 1 May 2018 but contingent to finalisation of the NMW legislation.

According to the agreement, the level of the NMW will be R20/hour.
Suffice to say the initial implementation date has since been postponed due to a need to address a number of issues raised by various stakeholders, including the level that the proposed minimum wage was set and the sectors in which it will be applicable.

It is for this reason that the Portfolio Committee on Labour is currently seized with oral submissions on three labour bills, including the National Minimum Wage Bill.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 235 While the introduction of a national minimum wage remains high on the policy agenda, although its relationship with job losses and job creation remains obscure, the National Economic Development and Labour Council (NEDLAC) agreement states that Government will conduct a Socio- Economic Impact Assessment (SEIA) before legislation is implemented.
According to NEDLAC, when fully implemented, the NMW will improve the lives of the 6.6 million workers who earn less than R3,500, the monthly national minimum wage for a 40-hour week.
A total of 4,8 million workers are currently covered by sectoral determinations, including the taxi industry (R10.78 per hour), domestic workers (R11.31), private security industry (R12.88), hospitality (R14.15) and farming and forestry (R14.25) many of which set wages below the national wage.23 In essence, the year 2016/ 2017 was characterised by continued efforts to raise awareness of the amended labour laws.
Furthermore, the implementation of the Action Plan to address the challenges in the Compensation Fund continues to produce notable improvements.

The Unemployment Insurance Amendment Bill was passed by both the National Assembly and the National Council of Provinces and was also assented to by the President of the Republic of South Africa on 11 January 2017.
Therefore, a major preoccupation in the past few months was to fast track the process of actioning the necessary legislative instruments to give effect to the recent ground breaking agreement on the modalities of introducing a National Minimum Wage in South Africa.

As a result, the Department performed well in 2016/2017, obtaining an overall achievement of 74% and 75% on the Employment Creation Strategic Objective.

2.
2.

Budget and Strategic Plan of the Department of Labour 2.1 Overview of the 2016/17 financial year and the current financial period During the 2016/17 financial year, the Department of Labour (DoL) received a total appropriation of R2.

848 billion.

At the end of the third quarter, 2016/17, the Department of Labour had spent R2.1 billion or ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 236 [Wednesday, 9 May 2018 77.2 per cent of the adjusted budget.
This was lower than what was projected by R123.6 million or 5.3 per cent.

According to the Department’s Annual Performance Plan for 2016/17, a total R2.3 billion would have been spent.

The slow spending was mainly in Programme 1: Administration and Programme 2: Inspection and Enforcement Services (IES) Programme under the compensation of employees.
Under the Administration programme the slow spending was due to slow spending on goods and services and payments for capital assets and under the IES programme the slow spending was due to transfers and subsidies.

However, when compared with the previous financial years, the Department has improved its quarter- to-quarter expenditure.

In the current financial year the Department and its entities received a total of R3.

295 billion for the current financial year.


The budget allocation has increased by 75.8 million or 2.49 per cent from 2017/18 allocation in real terms.
Table 1: Expenditure Estimates 2018/19 Programme Budget Nominal Real Nominal Real % Rand Rand % change change change change R million 2017/18 2018/19 2019/20 2020/21 2017/18-2018/19 2017/18-2018/19 Administration 884,0 917,4 977,0 1 038,2 33,4 - 14,4 3,78 % -1,63 % Inspection & 526,9 598,2 639,0 687,6 71,3 40,1 13,53 7,61 % Enforcement Services Public Employment Services 557,4 582,6 615,4 653,5 25,2 - 5,2 4,52 % -0,93 % % Labour Policy 1 079,4 1 197,1 1 201,7 1 269,5 117,7 55,3 10,90 5,12 % and Industrial Relations TOTAL 3 047,7 3 295,3 3 433,1 3 648,8 247,6 75,8 8,12 % 2,49% % Source: National Treasury, 2018 ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 237 A total of R1.9 billion will go to Current Payments, i.e.
Compensation of Employees (R1 317.8 billion) and Goods and Services (R628.9 million).

In addition, a total of R1.273 billion goes to Transfers and Subsidies, where the bulk of that allocation goes to departmental agencies and accounts with a total of R1 066.1 billion.

The majority of those transferred funds go to the CCMA (R963 066 Million).
Figure 1: Vote 28, Comparison of the split of the Department of Labour budget between Programmes Budget Allocation 1 400.0 1 200.0 1 000.0 0 0 0 0 0 0 ' 800.0 600.0 400.0 200.0 0.0 2017/18 2018/19 Programmes Source: National Treasury, 2018 Figure 1, above illustrates the weighting of the programmes as a percentage of the total Vote allocation as indicated, for 2017/18 and 2018/19.

The percentage changes in the size of the ‘slices’ indicated next to each programme.
Programme 1 is Administration, programme 2 is Inspection and Enforcement Services, programme 3 is Public Employment Services and programme 4 is Labour policy and Industrial Relations.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 238 [Wednesday, 9 May 2018 3.

Programme Analysis and Strategic Objectives 3.1 Programme 1: Administration The purpose of the Administration programme is to provide strategic leadership, management and support to the Department.
Table 2: Programme 1: Administration Sub-Programme Budget Nominal Real Nominal Real R million 2017/18 2018/19 Decrease Decrease change change in Increase / Increase / Percent Percent in in in 2018/19 2018/19 2018/19 2018/19 Ministry Management 32,2 34,5 2,3 0,5 7,14% 1,56% 255,4 255,0 - 0,4 - 13,7 -0,16% -5,36% Corporate Services 260,2 297,4 37,2 Office of the Chief 105,6 124,7 19,1 Financial Officer Office Accommodation 165,7 205,7 40,0 TOTAL 819,1 917,3 98,2 Source National Treasury, 2018 21,7 12,6 29,3 50,4 14,30% 8,34 % 18,09% 11,93% 24,14% 17,67% 12,0% 6,15 % Overall, there is a 6.15 per cent real increase in the budget allocation for administration, with a R 50,4 million more in real terms to spend on this function compared with the 2016/17 financial year.
3.1.1 The Strategic Objectives and targets of this programme are: • Contribution to best governance and management practices within the Department.

The Department aims to have 45 per cent of staff at standards 3 and 4 when using the Management Performance Assessment Tool (M-PAT) by 31 March 2018.

• Effective communication and marketing departmental work.

The Department plans to implement the activities in the action plan and develop a draft communication plan for 2019/20 by 31 March 2019.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 239 • Number of Annual Financial Statements (AFS) and IFS to comply with National Treasury request.

The Department aims to Compile and submit three Interim Financial Statements 30 days after each quarter and one Annual Financial Statement (AFS) by 31 May of each year to National Treasury and the Auditor General as well as the publication of the AFS in the Annual Report; and • Effective supply chain management.
The Department plans to report all irregular, fruitless and wasteful and unauthorized expenditure detected.

3.2 Programme 2: Inspection and Enforcement Services (IES) The purpose of this programme is to realise decent work by regulating non- employment and employment conditions through inspection and enforcement to achieve compliance with all labour market policies.
Table 3: Inspection and Enforcement Services (IES) Programme Budget Nominal Real Nominal Real R million 2017/18 2018/19 / / change change in Increase Increase Percent Percent Decrease Decrease in 2018/19 in in 2018/19 2018/19 2018/19 Management & Support 5,3 6,4 1,1 0,8 20,75% 14,46% Services: IES Occupational Health & 29,7 32,4 2,7 1,0 9,09% 3,40% Safety Registration: IES 62,5 67,3 4,8 1,3 7,68% 2,07% Compliance, Monitoring & 419,7 477,3 57,6 32,7 13,72% 7,80% Enforcement Service Training of Staff: IES Statutory and Advocacy Services TOTAL 5,4 8,6 5,6 9,2 0,2 0,6 - 0,1 0,1 3,70% -1,70% 6,98 1,40 531,2 598,2 67,0 35,8 12,6 % 6,74% Source: National Treasury, 2018 ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 240 [Wednesday, 9 May 2018 Overall, there is R 35, 8 million in real terms or 6.7% increase in the budget allocation for Inspection and Enforcement Services (IES) programme for the financial period 2018/19.
Looking at the table above only Training of Staff: IES indicated a decline with a real percentage change of 1.7 percent.

All other sub-programmes such as Management and Support Services, Compliance, Monitoring & Enforcement Service, Occupational Health & Safety and Registration: IES experienced real percentage change when comparing the 2017/18 financial period with the 2018/19 financial period.
The improvement in the budget allocation is in line with department anticipation of pressure that will be put on its resources after the implementation of the national minimum wage.

A total of R564.2 million has been allocated to Current Payments.

Over the medium term period, the current payments will have a 9.5 per cent average growth.

A total of R492.3 million goes to Compensation of Employees, which will see a 9.8 per cent average growth in the medium term, i.e.

2018/19 to 2020/21.
2018/19 to 2020/21.

3.3 Programme 3: Public Employment Services The purpose of the Public Employment Services (PES) programme is to provide assistance to companies and workers to adjust to the changing labour market conditions, and regulate private employment agencies.
Table 4: Public Employment Services Programme Budget Nominal Real Nominal Real Percent R million 2017/18 2018/19 Decrease Decrease change 2018/19 Increase / Increase / Percent change in Management & 44,1 47,6 3,5 1,0 7,94 % 2,31% in 2018/19 in 2018/19 in 2018/19 Support Services: Public Employment Services Employment 104,2 117,7 13,5 7,4 12,96% 7,07% Services ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 241 Worker Seeker 181,2 180,0 - 1,2 - 10,6 -0,66% -5,84% Services Designated Groups 12,7 13,5 0,8 0,1 6,30% 0,76% Special Services Supported Employment Enterprise 147,5 153,3 5,8 - 2,2 3,93% -1,49% Productivity South 50,3 53,3 3,0 0,2 5,96% 0,44% Africa Compensation Fund 15,9 Training of Staff: 1,4 16,1 1,2 0,2 - 0,2 - 0,6 - 0,3 1,26% -4,02% -14,29% -18,75% Public Employment Services TOTAL 557,3 582,7 25,4 - 5,0 4,6% -0,89% Source: National Treasury, 2018 The public employment service budget decreased by 0, 89% in real percentage terms.
That is a real decrease of R5 million for the financial period of 2018/19.

Work-Seeker Services sub-programme saw a real decrease of R10.6 million which translates into a 5.8 per cent real decrease in the 2018/19 financial year.
A real increase of R7.4 million can be noticed in the Employer Services sub-programme which is responsible for among other things; registering work opportunities, facilitates the employment of foreign national where such skills do not exist in South Africa, oversees placements etc.

This sub-programme also responds to companies in distress, provides a social plan and regulates private employment agencies.

This increase is intended to give support to the registration drive by the Department.
A total of R351.6 million has been set aside for current payments, with the compensation of employees receiving a total of R312 million during the 2018/19 financial year.

A total of R39.6 million has been set aside for goods and services.

Transfers and subsidies amount to R229.7 million in the 2018/19 financial year, of that amount, a total of R69.4 million goes to the ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 242 [Wednesday, 9 May 2018 departmental agencies and accounts.
The difference of R160.

2 million goes to Non-profit organisations namely Deaf Federation of South Africa, National Council for the Blind, Workshops for the blind, and Work-centres for the disabled.

Over the medium term the compensation of employees classification will grow at an average rate of 4.8 per cent and the goods and services will grow at an average of 12, 1 per cent.

Transfers and subsidies will grow at an average rate of 5, 3 per cent between 2017/18 to 2020/21.
The Strategic objectives of this programme are to register work-seekers; register work and learning opportunities; provide employment counselling; and place work-seekers in work and learning opportunities.

The programme aims to register 650 000 work seekers and 85 000 work and learning opportunities; provide 200 000 employment counselling to registered work- seekers; and place 42 500 work seekers in work and learning opportunities.
It seems that there is more emphasis put on the registration than placement of work seekers.
3.4 Programme 4: Labour Policy and Industrial Relations The purpose of this programme is to facilitate the establishment of an equitable and sound labour relations environment and promote South Africa’s interests in international labour matters through research, analysing and evaluating labour policy, providing statistical data on the labour market, and supporting institutions that promote social dialogue ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 243 Table 5: Labour Policy and Industrial Relations Programme Budget Nominal Real Nominal Real R million 2017/18 2018/19 / / change change in Increase Increase Percent Percent Decrease Decrease in 2018/19 in in 2018/19 2018/19 2018/19 Management & Support 15,6 16,5 0,9 0,0 5,77 0,26 Services: Labour Policy & Industrial Relation Strengthen Civil Society 19,8 21,0 Collective Bargaining 15,8 16,1 1,2 0,3 Employment Equity 16,4 14,4 - 2,0 Employment Standards 15,8 29,2 13,4 Commission for 864,1 963,1 99,0 0,1 - 0,5 - 2,8 11,9 48,8 6,06 1,90 0,53 -3,41 -12,20 -16,77 84,81 75,18 11,46 5,65 Conciliation, Mediation and Arbitration Research, Policy and 10,4 9,8 - 0,6 - 1,1 -5,77 -10,68 Planning Labour Market Information 41,6 45,0 3,4 1,1 8,17 2,53 and Statistics International Labour 48,0 48,3 0,3 - 2,2 0,62 -4,62 Matters National Economic 31,8 33,7 1,9 0,1 5,97 0,45 Development and Labour Council TOTAL 1 079,3 1 197,1 117,8 55,4 10,9 5,13 Source: National Treasury, 2018 A total of R1.2 billion was allocated to the Labour Policy and
 Industrial Relations programme during the 2018/19 financial year.
This programme saw a real increase of R55.4 million, translating into 5.13 real per cent increase.

The Commission for Conciliation, Mediation and Arbitration (CCMA) received the largest share of the programme budget at R963.1 million of the programme budget.

In real terms, the budget allocation of the CCMA increased by R48.8 million or 5.65 real percentage ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 244 [Wednesday, 9 May 2018 increase.
Over the medium term, the budget of the CCMA will grow by 5.1 per cent on average between 2018/19 to 2020/21.

The second largest share of the programme budget goes to International Labour Matters sub- programme at R48.3 million.

However, in real terms the sub-programme registered a decrease of R 2, 2 million.

The National Economic Development and Labour Council (NEDLAC) was allocated R33.7 million in the 2018/19 financial year, which is a nominal increase of R1,9 million or 5.97 real per cent increase.
In real percentage terms NEDLAC saw an increase of 0.45 per cent in its budget allocation.

Over the medium term 2018/19-2020/2021, the NEDLAC budget will increase at an average rate of 5.6 per cent.

3.4.1 The strategic objectives of this programme are: • To establish basic standards and minimum wages.

The Department plans to set up the institution of the National Minimum Wage by March 2019.

This is done to advance national priorities through bilateral cooperation and multilateral relations.
• To promote sound labour relations.

In this regard, the Department plans to extend all collective agreements within 90 calendar days of receipt by 31 March 2019.

It also plans to approve or refuse all applications by labour organisations for registration within 90 calendar days of receipt by end of March 2019.

• To monitor and evaluate the trends and impact of legislation in the labour market.

The Department plans to produce four labour market trend reports by March 2019.
• The Department will produce four literature review reports for labour market research, which will be signed off by the DG for the programme by 31 March 2019.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 245 4.

Public Entities of the Department of Labour 4.1 Compensation Fund (CF) The Compensation Fund derives its mandate from Section 27(1) (c) of the Constitution.

In terms of the Constitution, all South Africans have a right to social security.
The Fund is mandated to provide social security to all injured and diseased employees.

The Fund administers the Compensation for Occupational Injuries and Diseases Act No 130/1993 as amended by the COIDA 61/1997.

The main objective of the Act is to provide compensation for disablement caused by occupational injuries or diseases sustained or contracted by employees, or for death resulting from injuries or diseases.
The Fund generates its revenue from levies paid by employers and this consists of annual assessments paid by registered employers on a basis of a percentage or fixed rate of the annual earning of their employees.

Total revenue for the entity for the 2018/19 financial year is estimated to be R16, 6 billion, while total expenditure of the entity is expected to amount to R11 billion, resulting in a surplus of R5.6 billion in the current financial year.
In terms of Economic Classification R 843 370 million will be spend on Compensation of Employees, 1.1 billion will be spend on goods and services and R 194 251 million Capital Expenditure (Total Administration Budget).

The difference of the expenditure budget of R8, 9 billion will be spend on Compensation, Medical and Rehabilitation.

The functions of the Fund are structured into three programmes, which are Administration, Operations Management and Provincial Operations- COIDA.
The strategic objective of the Administration programme is to provide an effective and efficient client oriented support services.

4.1.1 The planned targets for the Administration programme are: • To improve the maturity of the Fund risk management to level 4 by 31 March 2019.

• To implement 85 per cent of projects on the risk based audit plan annually by 31 March 2019.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 246 [Wednesday, 9 May 2018 • To achieve investment return rate of CPI plus 2 per cent at 31 March 2019.

The strategic objective for Operations Management programme is to provide faster, reliable and accessible COID services by 2020.

4.1.2 The targets for this programme are: • To pay 98 per cent of approved benefits within five working days.

• 75% of active registered employers assessed annually by 31 March 2019.
• 90% of claims adjudicated within 40 working days of receipt.

Like the Operations Management, the strategic objective for the Provincial Operations programme is to provide faster, reliable and accessible COID services by 2020.

The targets for provincial operations are: To adjudicate 85 per cent of claims within 60 working days of receipt.

 To finalise 85 per cent of medical invoices within 60 working days of receipt.
The targets for provincial operations are: • The strategic objective of Orthotics, Rehabilitation and Lap programme is similar to the above aims to provide faster, reliable and accessible COID services by 2020.

• 85% of received assistive devices requests responded to within 30 working days.

4.2 Unemployment Insurance Fund (UIF) Like the CF above, the UIF derives its mandate, through the Department, from the Constitution.
Section 27 of the Constitution makes provision for adequate social security nets to protect vulnerable workers.

The mandate of the UIF is stated in the Unemployment Insurance Act.

The UIF was established in terms of section 4(1) of the Unemployment Insurance Act (Act 63 of 2001) as amended.

The Act empowers the UIF to register all employers and employees in South Africa.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 247 The Unemployment Contributions Act (Act 4 of 2002) empowers the SARS Commissioner and the Unemployment Insurance Commissioner to collect monthly contributions from both employers and workers.
Section 9 of the Unemployment Contributions Act, empowers the Unemployment Insurance Commissioner to collect contributions from all those employers who are not required to register as employers in terms of the fourth schedule to the Income Tax Act and who are not liable for payment of the skills development levy in terms of the Skills Development Act (Act 9 of 1999).

These contributions are utilised to pay benefits and any other expenditure reasonably incurred relating to the application of this Act.
The operations of the UIF are structured into three programmes, which are Administration, Business Operations and Labour Activation Programmes.

The total budget for 2018/19 financial year amounts to a total of R32.7 billion.

The Labour Activation Programme seeks to engage and promote activities that preserve and create jobs.
This programme focuses on: • Targeted training of the unemployed; • Partnership with companies in distress; • Partnership with other government departments, as well as with certain public entities; and • Support employment creation initiatives.
The strategic outcome oriented goals of the UIF are: To improve collection of revenue from employers; To improve payment of benefits to beneficiaries of the Fund; To participate in government initiatives of creating and sustaining decent employment; and To administer the Fund’s operations effectively.

The strategic objective of the Administration programme is to provide management with strategic and administrative support that service the fund.
This is done through ensuring financial sustainability by developing targets such as administrative expenditure that plans to have 15 per cent administrative expenditure as a percentage of revenue.
The subprogramme ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 248 [Wednesday, 9 May 2018 included new indicators in this financial period, indicators that track the percentage of valid invoices paid in 30 calendar days after receipt by the fund, Number of provincial sites upgraded to have access to free Wi-Fi to give access to UIF systems, integrated claims management system implemented and an indicator that tracks the reduction of vacancy rates so as to be less than 10% by March 2019.
This sub-programme also plans to have 80 per cent of total mandated social responsible investment committed by March 2018.

The strategic objective of the Business operations programme is to provide easy to use services through multiple access points.
The UIF aims to have 90 per cent of valid unemployment benefit claims with complete information approved within 15 working days by March 2018; 90 per cent valid claims (in-service benefits, maternity, illness and adoption benefits) with complete information approved or rejected within five working days by March 2018; 90 per cent of valid deceased benefit claims with complete information approved or rejected within 10 working days by March 2018; 95 per cent of payment documents processed within seven working days of receipt by 31 March 2018; 90 per cent of new companies with complete information issued with registration certificate within two working days by 31 March 2018.
UIF included a new indicator to measure the percentage of applications with complete information issued with compliance certificate or tender letter within 10 working days by March 2019, Number of newly registered employers per year and Number of newly registered employees with the fund.

The strategic objective for the Labour Activation Programme is to enhance employability of UIF beneficiaries, enable entrepreneurship and preserve jobs.
In this regard the UIF aims to target 450 000 beneficiaries with learning and work place opportunities, and achieve a 90% training lay-off scheme applications with complete information recommended or decline by the PAC (Project adjudication Committee).
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 249 4.3 Commission for Conciliation, Mediation and Arbitration (CCMA) The CCMA is a statutory body established in terms of section 112 of the Labour Relations Act of 1995 as amended.

In terms of section 113 of the Labour Relations Act (LRA), the CCMA is independent of the State, any political party, trade union, employer, employers’ organisation, federation of trade unions or federation of employers’ organisaton.
The CCMA’s Constitutional Mandate is derived from Section 23 of the Constitution of the Republic of South Africa.
The 2018/19 Annual Performance Plan Priorities for the CCMA are to: • Effectively and efficiently implement the legislated mandate of the CCMA with respect to conciliations and arbitrations; • Enhance and expand the Employment Security mechanisms to save jobs and alleviate business distress; • Facilitate improved Collective Bargaining to promote orderly and healthy labour relations; • • Intensify Dispute Management and Prevention interventions to reduce conflict in the workplace and transform workplace relations; and Improve governance processes and strive for maximum compliance to prescripts and best practices to improve business processes.
The discretionary mandate of the CCMA includes: • Dispute management and prevention; • Improved collective bargaining; and • Employment security.

The operations of the CCMA are structured into four programmes, which are Administration, Institutional Development, Corporate Governance and Social Services.

The Administration programme received the largest share ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 250 [Wednesday, 9 May 2018 of the budget in 2018/19 financial year at R482.
787 million, followed by the Social Services programme at R446.

877 million.

The Institutional Development programme was allocated R26.

313 million.

The Corporate Governance programme received the least allocation at R5.5 million.

The strategic objectives of the CCMA are to: • Enhance the labour market to advance stability and growth; • Advance good practices at work and transform workplace relations; • Build knowledge and skills; and • Optimise the organisation.
With regard to strategic objective number one, the CCMA plans to convene one engagement with strategic labour market stake-holders to provide leadership on identified strategic labour market topics and four engagements with users to facilitate social dialogue on identified strategic labour market issues in the current financial year.

It also intends saving 35 per cent of those jobs referred to it as due for retrenchment in 2018/19.
The CCMA intends to establish four new strategic partnerships for strategic collaboration to accelerate service delivery in the labour market for the benefit of the users in the current financial year.
In pursuance of strategic objective number two, the CCMA plans to deliver 12 capacity building interventions on effective negotiation skills to users, one collective bargaining improvement process to identified users in an identified sector and four collective bargaining support processes proactively to users in the current financial year.

It also plans to deliver two transformations in the workplace interventions for users in the current financial year.
The CCMA plans to conduct 96 capacity building interventions to users in 2018/19 in order to build knowledge and skills, in accordance with strategic objective number three.

The CCMA intends to conduct 43 training interventions to capacitate the work-force for efficient and effective delivery of the CCMA mandate.
ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 251 4.4 National Economic Development and Labour Council (NEDLAC) NEDLAC was established through NEDLAC Act (35 of 1994).
NEDLAC objectives in terms of the Act are to: • Strive to promote the goals of economic growth, participation in economic decision-making and social equity; • Seek to reach consensus and conclude agreements on matters pertaining to social and economic policy; • Consider all proposed labour legislation relating to labour market policy before it is introduced in Parliament; • Consider all significant changes to social and economic policy before it is implemented or introduced in Parliament; and • Encourage and promote the formulation of coordinated policy on social and economic matters.
The main source of revenue for NEDLAC is the grant allocation from the Department of Labour.

In the current financial year, NEDLAC was allocated R33.7 million by the Department.

It received R603 000 from interests and R147 000 from other income, amounting to the total income of R34.4 million in the current financial year.

The operations of NEDLAC are structured into three programmes, which are Administration, Core Operations and Constituency Capacity Building programme.
The purpose of the Administration programme is to enhance strategic oversight and governance of the entity.

This programme received the largest share of the budget at R23.4 million in the 2018/19 financial year.

This translate to 69.4 per cent of the total budget of the entity.

This programme has six sub-programmes, which are Entity Management, Corporate Services, Finance Administration, Office Accommodation, General Office Administration and Human Resource Management.
The Constituency Capacity Building programme received the least allocation at R4.4 million of the total budget of the entity in the current financial year.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 252 [Wednesday, 9 May 2018 The purpose of this programme is to promote social dialogue and capacity building, awareness of NEDLAC activities and enhance the perception of NEDLAC among stakeholders.
The programme has three sub-programmes, which are Business Constituency, Community Constituency and Labour Constituency.

The purpose of the three sub- programmes is to ensure that the three Constituencies Capacity Funds are spent in compliance with the NEDLAC Policy on Constituency Capacity Building Budgeting and Expense.
4.4.1 Nedlac Priorities 2018/19 • Enhance communication and outreach, which would entail forming strategic partnerships with other communicators, and healthy relationships with the media.

• The National Minimum Wage (NMW) will remain one of the key deliverables for Nedlac, and also ensuring that the work that flows from the NMW lives beyond the implementation date of May 2018.
• Comprehensive Social Security (CSS) will form a pivotal part of that South Africans who are NEDLAC’s work, ensuring currently outside the security net are also covered.

• Substantially advance engagement on work of the National Health Insurance (NHI).

• To continue with the consideration of Section 77 Notices in line with the Nedlac Protocol and Code of Good Practice.

• Enhance risk management systems and compliance.


• Seek additional funding in order to address the issue of insufficient budget allocation and underfunded projects/ mandates which are undertaken by Nedlac.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 253 • Effective implementation of the audit action plan.

• Improve capacity of the secretariat to attract and retain highly skilled staff to carry out the mandate of Nedlac.
• Build research capacity in line with the ILO recommendations.

4.5 Productivity South Africa Productivity SA was established in terms of section 31 of the Employment Services Act (No.4 of 2014) as a juristic person.

It is an entity of the Department of Labour with the mandate to promote employment growth and productivity, thus contribute to South Africa’s socio-economic development and economic efficiency.
Section 32 of the Act enjoins Productivity SA to amongst others, develop relevant productivity competencies in workplaces, with a focus on the following core functions: • To promote employment and income growth and workplace productivity.

• To improve the employment and re-employment prospects of employees facing retrenchments and those retrenched.

• To promote social dialogue and a culture of productivity and competitiveness in the workplace and all spheres of the nation’s economic and community life.
• To provide productivity improvement and competitiveness measures.

• Research on productivity and competitiveness related matters and collection and supply of information.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 254 [Wednesday, 9 May 2018 Productivity SA derives its revenue from transfers from the Department of Labour, Unemployment Insurance Fund (UIF) and the Department of Trade and Industry (DTI).
In the current financial year, the Department transferred R53.2 million, UIF allocated R196.2 million and R9.5million was received from the DTI.

The operations of Productivity SA are structured into six programmes, namely Corporate Services, Human Resource Management, Marketing and Communication, Productivity Organisational solutions, Value Chain Competitiveness, and Turnaround Solutions.
4.5.1 Priority Economic sectors to be targeted in the MTSF Productivity SA’s Enterprise Support Programmes focuses on achieving a productive high-income economy which is globally competitive, targeted at the core productive sectors of the economy which have a potential for labour absorption, including: • Agriculture / Agro – processing; Agri-business • Energy • ICT • Manufacturing – Metal Fabrication • Mining – Platinum Group Metals.

5.
5.

KEY ISSUES FOR CONSIDERATION BY PARLIAMENT According to available research, subscribing companies filled 56 per cent of all their vacancies with work seekers registered on the PES system.

But the service is hampered by a range of obstacles including poor infrastructure, which leads to incomplete records being kept, and network failures that make the system painfully slow.

This affects its reliability.


These barriers affect the extent to which both employers and work seekers rely on the system as a route to the labour market.
Yet, according to the Annual ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 Wednesday, 9 May 2018] 255 Performance Plan (APP) of the Department, the PES programme has not set targets to address these infrastructure challenges, instead it emphasises on continuous enormous numerical targets which do not address the immediate challenges of the work-seekers.

The PES programme targets have not responded to perceptions that the system is mainly for intermediate and low-skilled job seekers.
In planning to invite high skilled work-seekers, how does the programme targets address this challenge?

The Department of Higher Education and Training (DHET) institutions have a potential to add value to the ESSA system and as such the Department of Labour should outline its plans to cooperate with these institutions.

Parliament has amended various legislation in 2015, such as the Employment Equity Act, the Labour Relations Act, the Basic Conditions of Employment Act and the new Employment Services Act.
As part of the Portfolio Committee on Labour’s (PCoL) oversight role, it is important to assess the impact of those amendments and evaluate whether these have had any bearing on the challenges prior to their promulgation.

In preparation of the budget, the National Treasury or the Minister of Finance prepared a response to the Parliament’s Budgetary Recommendations and Review Reports (BRRR).
Part of the response related to the recommendation by the Committee was that the National Treasury gives serious attention to and ensures that more labour inspectors are appointed by the Department of Labour.

6.

RECOMENDATIONS The Committee is generally satisfied with the plans of the Department and its entities.

However, the Committee recommends that the Minister of Labour considers the following: ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018 256 [Wednesday, 9 May 2018 1.
That the budget of Inspection and Enforcement Services programme be increased so that more inspectors are hired and provided with relevant tools of trade.

2.

That the budget of the CCMA be reviewed to reflect the increased responsibilities that will come with the implementation of the labour law amendments currently being considered by Parliament.

3.
3.

That the Department of Labour markets the services provided by the Public Employment Services programme so as to increase the placement rate of job seekers.

This might include encouraging other government departments to use the services offered by the programme.

4.

That the Department and entities address issues raised by the Auditor-General of South Africa (AGSA).

5.
5.

Managers of programmes of department and entities that are not performing must be called to account to give effect to consequence management.

6.

That the department and its entities must fill all vacant funded posts without delay, and report progress to the Committee on a quarterly basis.

Report to be considered.

ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 57─2018