Honourable Members
Invited guests
Ladies and gentlemen
Comrades and friends
The presentation of the first ever Human Settlements Budget �" Vote 30 - is a significant milestone in the journey from housing to human settlements and demonstrates the paradigm shift we are making as national government - both in our thinking and our actions.
We have refined the understanding of our mandate. We have begun to align our policies, plans and budgets. In this way, we shall achieve our Human Settlement mission: to provide decent shelter, the most basic need, for a better life for all our citizens.
We shall highlight the three areas of human settlements delivery and intervention, which touch every South African:
Firstly, at the uppermost end of the housing market, where people easily qualify for credit finance, our responsibility is to create an enabling environment through policies and legislation which protect consumers. This we do primarily through HLAMDA -- that is, the Home Loans and Mortgage Disclosure Act of 2000.
In terms of the Act, financial institutions are required to provide the Minister of Human Settlements with information in their annual financial statements on lending patterns.
Such information has to be accurate, timeous and comprehensive to allow for its consolidation and analysis by the Department. This enables us to assess the performance of these institutions in providing credit to all South Africans who qualify.
The Ministry will play an activist role in monitoring the banks’ performance in this area, in the interests of regulating the homeowners’ property market, whilst being alive to the complexity and sensitivity of the operations of financial institutions.
In our recent meeting with all major financial institutions of our country, we have assured them of our commitment to strengthening our own disclosure office and �" to the extent where Human Settlements is concerned - to examine and, where possible, to ease any onerous reporting procedures without diminishing their compliance in respect of the Act.
Secondly, we have a role to play to assist people who don’t qualify for either bank credit or government Reconstruction and Development Programme (RDP) subsidies. This is the so-called gap market. We have heard their concerns. Consequently, the President announced in his State of the Nation address the creation of a R1-billion Guarantee Fund aimed at providing support for people within this market.
Those who stand to benefit from such a financial platform include inter alia nurses, teachers, police, prison warders, government officials, certain categories of management, and blue collar factory and office workers.
We have emphasised to financial institutions that in putting the floor under their operations in this “gap market” to mitigate risk, while also providing an opportunity to beneficiaries, financial prudency should remain paramount in accordance with regulatory requirements. In no way can there be recklessness in lending practices.
Similarly, beneficiaries are well-advised to exercise responsibility by adhering to the terms and conditions under which credit is availed.
To a certain extent, this National Council of Provinces has a responsibility to play a role in respect of bringing this knowledge to the attention of these sections of our people.
Our third area of responsibility in the delivery of Human Settlements relates to the bottom-most end of the market, where we provide housing subsidies to the poorest of the poor. This is a critical area, as the bulk of the housing backlog exists there and affects largely those who earn between R0 and R3 500 a month.
The total amount allocated to grants for the poor in our Budget during this period is R15 billion, rising to R17.9 billion in 2013/14.
A large percentage of this is allocated to provinces in the form of Housing Development Grants.
In addition, starting from this financial year, we have an allocation of R1.2-billion for the sanitation programme to deal with the rural infrastructure backlog.
These endeavours, beyond providing shelter, contribute to economic growth and job creation - whilst at the same time restoring human dignity.
Our holistic approach recognises that the economic fortunes of South Africans are never static. Someone who lives in a shack in Gugulethu today may occupy an RDP house in Delft tomorrow �" or, later, reside in Rondebosch.
Current outcomes-based approach
As the Ministry, working within the Cabinet collective, we participated in developing a new outcomes-based approach to defining our targets and to measuring progress.
The January 2010 Extended Cabinet Lekgotla tasked us with implementing what is known as Outcome 8, whose objective is: Sustainable Human Settlements and Improved Quality of Household Life.
Consequently, we have prioritised four areas of work between now and 2014.
These are:
* Accelerated delivery of housing opportunities;
* Access to basic services;
* More efficient land utilisation; and
* An improved property market.
In the field of housing opportunities, the target is 220 000 units per year between now and 2014.
Additionally, we are acquiring 6 250 hectares of well-located state land for Human Settlements development and an enabling environment is being created for the provision of 600 000 new loans in the affordable housing sector.
In addition, 500 000 informal settlement dwellings are being upgraded. We must emphasise that such upgrading does not detract from Government’s long-term objective of eradicating slums.
The combined effect of this is that by 2014 we will have made significant inroads in our mission of ensuring sustainable human settlements and an improved quality of household life.
A series of workshops have already been held with our provincial government colleagues to align provincial planning and expenditure to the targets set by the Cabinet Lekgotla, and these will be ratified at MinMEC later this month.
In this regard, I am happy to announce that the President and I have signed a performance agreement that puts Outcome 8 into effect. I assured him of my readiness for the task.
Government’s track record
Irrespective of what sceptics may say, the record of this government on housing delivery speaks for itself. Since 1994, more than 2.3 million housing units have been made available for nearly 11-million people.
This work continues unabated and as things stand today we have more than 8 000 human settlements projects underway across the country, with preliminary figures translating this into the construction of 219 000 housing units in the past financial year.
At the same, there is a need for realism as we go forward. We must be candid inside this National Council of Provinces, and with the nation at large.
Despite all these commendable efforts, the housing backlog has grown in leaps and bounds from 1.5-million in 1994 and now stands at approximately 2.1-million. That means approximately 12-million South Africans are still in need of better shelter. We have, therefore, hardly moved in just breaking the backlog, never mind the numbers associated with population growth.
As a reflection of the increased demand, the number of informal settlements has ballooned to more than 2 700.
Our reality is that we are currently only able to clear the housing backlog at a rate of ten percent per annum. With the current pace of delivery and the resources at our disposal, and mindful of continued economic and population growth and the rapid pace of urbanisation, it could take us decades to break the backlog.
In real terms, as a country, we have hardly moved.
Nevertheless, we can never turn our backs on the poor. It is not their fault nor should poverty be used as a political football.
The scale of the problem has already been brought to the attention of Government colleagues in a presentation to the extended Cabinet.
Of significance are Human Settlements presentations made during the Presidential Coordinating Council in March, where ministries, as well as Premiers and members of the South African Local Government Association (SALGA), were led in discussion by the President in serious debates around service delivery.
In respect of Human Settlements, it was recognised that the current fiscal allocations are inadequate �" with the potential unintended consequence that budget allocations do not match our expanded mandate.
Also captured in discussion was the fact that, although budgets are important, our work also requires thorough coordination with government stakeholders in all three spheres, as well as with the private sector and civil society.
Consequently, the President has instructed that a special PCC be held on the 18th of May to focus all the efforts of government and other stakeholders, including experts, with only one topic on the agenda: human settlements.
The Presidency and the Ministry have already held several planning meetings so that we go into this PCC adequately prepared. We have also consulted with our colleagues in provincial government, as well as with representatives of the six major Metros, on a collective input to be made to the PCC on the 18th.
Towards Human Settlements 2030
Questions are being asked about what will continue to propel the South African economy beyond the current infrastructural developments which are also associated with the 2010 FIFA World Cup.
Undoubtedly, the World Cup will be a resounding success. South Africa has constructed massive highways, iconic stadiums, world-class airports and state of the art technology platforms.
The target for Human Settlements ought to be nothing less than an enhanced vision, driven by a similar energy and passion to World Cup 2010 �" this time round, Human Settlements 2030.
To that end, we as South Africans must explore the possibility of marshalling resources in a similar fashion to the way we impressed the world �" correctly so - with preparations for the World Cup. This time round, we should give hope to people who live in depressed conditions.
The current large-scale mobilisation of human, capital, financial, logistical, construction, project management and other resources should not dissipate after the final World Cup whistle. The objective should be to turn the country into one large construction site as we build sustainable human settlements in various localities.
In this regard, we welcome the new National Planning Commission, whose responsibility is to develop an overarching national strategic plan. Our Human Settlements planning tasks can only succeed within such a framework.
In crafting our vision, we are mindful that a child born today will be 20 years old by 2030, and will need somewhere to live. We are planning for the needs of that future adult.
To succeed, Human Settlements 2030 must be for and by the youth �" it is about their own future homes, apartments, bachelor flats and so on, and about contributing to economic growth and job creation. This should be their campaign.
Housing construction and manufacturing are some of the key drivers of the economy. They stimulate every sector - mining, agriculture, manufacturing, construction, wholesale, retail and, most importantly, finance. There is no successful industrialised nation which has human settlements at the backburner, or merely as a welfare issue.
In this context, the Department is forging stronger relationships with the financial sector which play a central role in providing credit and housing finance.
During recent engagements with the country’s major banks, we came away satisfied at the positive outcomes, and we can confirm to the National Council of Provinces that we agreed to form a joint working team to look into various aspects of housing finance - including how to generate innovative ideas around the R1-bn Government Guarantee Fund referred to earlier.
The current budget
As we plan and implement our expenditure in this financial year, it is appropriate that we emphasise several positive developments taking place within Human Settlements:
* Firstly, we can report that provinces spent a total of R12.2 billion, or 98.4% of their allocation, by 21 April.
* Secondly, there is an increased rollout of sanitation infrastructure programmes in rural areas.
* Thirdly, significant progress has been made in building local government capacity through our municipal accreditation process, whereby all six metros and four local municipalities have been assessed.
* Fourthly, the Sectional Titles Schemes Management Bill and the Community Schemes Ombuds Service Bill are going to be introduced to Parliament this year.
Good progress has also been made in two crucial areas of work: our war on waste, and our war on corruption.
Preliminary expenditure reports for the 2009/2010 financial year indicate that we have saved R53.2 million in operational expenditure. This includes a saving of R20.6 million in cuts to travel and subsistence, R24.4 million in cuts to our advertising budget, and R3.3 million in cuts to administrative fees.
An additional R31 million was saved from personnel expenditure and R34-million from transfers to our institutions.
Intensifying the fight against corruption
As part of our ongoing battle against corruption, I appointed a National Audit Task Team last November, headed by the Special Investigations Unit, working in partnership with the Auditor-General's office, our national department and provincial government representatives.
The task team is hard at work tracking down those responsible for corruption, abuse and malpractices.
Working under the sterling leadership of the head of the Special Investigation Unit (SIU), Willie Hofmeyr, the team has made tremendous progress since its appointment and has almost completed its investigation into abuse of the Low Income Housing Subsidy scheme. 1 570 officials have been arrested to date, of whom 1 189 have been convicted, and R38 million has been recovered. This process has also seen five lawyers struck off the roll �" and more is to follow, as we are undeterred in our resolve to eradicate this plague.
Additionally, it is noteworthy that Cabinet has created an inter-Ministerial task team to address the scourge of corruption �" as the President indicated, no matter who may be involved, and no matter how high.
Areas of concern
It would be remiss of us not to highlight some fundamental challenges to the delivery of sustainable human settlements.
The first relates to what we characterise as “the legalisation of illegality”. This refers to the negative impact of unintended consequences emanating from certain landmark judicial rulings on the human settlements mandate. In some cases, the rulings have forced the amendment of human settlements policy, with severe and unplanned budgetary consequences.
The most recent far-reaching ruling is the one against the Johannesburg Metropolitan Municipality where the city has been ordered to pay rent to a private property owner on behalf of illegal occupiers until alternative accommodation has been found.
While being dutifully circumspect about the constitutional independence of the Judiciary, the Ministry of Human Settlements is concerned about rulings that could virtually collapse government budgets and plans where unlawful behaviour �" in this case illegal land and buildings’ occupation - is legitimised by a series of court rulings.
My colleague, Justice Minister Jeff Radebe, has been mandated by Cabinet to take the lead towards resolution of this matter, in consultation with Human Settlements.
This National Council of Provinces will need to itemise this discussion.
Of equal concern are bureaucratic blockages which affect every step of the human settlements delivery chain.
As part of its outcomes-based approach, Government has resolved that we must make our work simpler, reduce compliance work that adds no value, and focus our energies on a few deliverables and do them well.
The Human Settlements Ministry could not agree more.
Conclusion
In conclusion: we remain seized with our fundamental mission of rolling out sustainable human settlements. We do not underestimate the enormity of the task involved.
We appreciate and welcome the constructive criticism that has always come from the NCOP, particularly from the Select Committee. We are equally encouraged by the commitment and sense of common purpose shown
by our human settlements MECs.
We are enthused by the fact that our institutions are ready to be in the forefront of the drive to create sustainable human settlements.
We remain sincere in our dialogue with the poorest of the poor.
We remain convinced that the unfolding strategy around Human Settlements 2030 is the right one, and builds upon the other achievements in this area over the past 16 years.
This Ministry carries a responsibility to all South Africans who have the right not just to a home, but also to privacy, security and comfort in their homes within the human settlements in which they live.
I thank you.
Issued by: Department of Human Settlement
6 May 2010
