Minister Thandi Modise: Defence Dept Budget Vote 2022/23

Introduction of the Debate on the Defence Budget Vote 2022 (Vote 23 & Vote 26) in the National Assembly, By Hon Thandi Ruth Modise, Minister for Defence and Military Veterans, Parliament, Cape Town

“A council was held; lots were cast who should walk up to the Master after supper that evening, and ask for more; and it fell to Oliver Twist.

Child as he was, he was desperate with hunger, and reckless with misery. He rose from the table; and advancing to the Master, basin and spoon in hand, said: somewhat alarmed at his own temerity:”

'Please, sir, I want some more.' From Oliver Twist by Charles Dickens

  1. Greetings

Speaker of the National Assembly
Deputy Speaker, House Chairpersons of the National Assembly
Deputy Minister of Defence, Honourable Thabang Makwetla
Cabinet Colleagues and Deputy Ministers
Chairpersons and Members of the Portfolio Committee on Defence and Military Veterans and the Joint Standing Committee on Defence
Honourable Members
Secretary for Defence, the Chief of the National Defence Force and the Director-General of the DMV
Chairpersons, CEOs and Heads of all entities of the Ministry of Defence and Military Veterans
Distinguished guests
Friends and fellow South Africans

  1. Introductory Comments

Honourable Speaker,

In July 2021, South Africa found herself in the middle of civil unrest in Kwa-Zulu Natal and Gauteng Provinces. Properties and businesses were damaged and looted. The target areas were malls and business that were damaged and looted.

SANDF was in cooperation with SAPS, to quell these unrest and to restore law and order.

We deployed +/-15 000 members of the SANDF, to quell the unrest. Operation Proper was successful and was lauded by the citizens and business across the country.

Honourable Speaker,

During the SONA 2022, the President committed to the up-scaling of the Welisizwe Rural Bridges Programme to deliver ninety-six (96) bridges a year.

SANDF has assessed this need and has started to construct bridges in KwaZulu-Natal, Eastern Cape, Free State and North-West Provinces since 01 April 2022.

Honourable Speaker,

We were very grateful to accept the first of three multi-mission Warrior Class inshore patrol vessels into service on Wednesday 18 May 2022. This is the part of “rejuvenating our patrol capacity. The SAS Sekhukhune will greatly assist in securing South Africa’s maritime zones.

  1. Reimbursement

Honourable Speaker,

Over recent years, SANDF has been called upon to support civil intervention to ensure the delivery of basic services to the citizens of our country.

We are contributing to African Peace Missions. We have assisted the North-West Province with health services, the Department of Water and Sanitation with the Vaal River clean-up project, the National Disaster Management Centre has called on SANDF to assist during the COVID-19 Pandemic and we are still involved in the Kwa-Zulu Natal flood relief.

The deployments speak to our responsibilities and there is no way we cannot be at the centre of saving lives.

These deployments also come at great cost to the equipment and funding of the SANDF. There is often little or no re-imbursement delivered. This puts SANDF under great pressure.

Hon Members will remember that we have a dire shortage of critical equipment currently, not to speak of future disasters and continuous climate change events, for example: tents, water purification and distribution systems are critically low. Serviceable air-frames and flying hours are also in critical state.

Honourable Speaker,

I must inform this House that the SANDF will be hard pressed to respond to critical events in other Provinces should the need arise. I state this with a very heavy heart – we are willing but we lack resources.

Unless there is a significant and intervention – the cupboard will remain bare.

4. Unpacking the defence dilemma

Honourable Speaker,

South Africa must continue to enlist both the hard power and soft power domains to mitigate all threats against the State, its National Interests and its People, including emerging “borderless” and “stateless” threats.

The decline in the performance of the South African economy has placed significant pressure on Government and households. It is becoming difficult to adequately meet all competing needs – this is fertile ground for instability.

The historical downward trend in the Defence Allocation has not abated. It is likely to continue to the detriment of the SANDF and the demise of the defence industry.

Defence planning has become primarily a budget-driven affair as opposed to a mandate-driven one. This means that our ability to deliver on our Constitutional Mandate ultimately compromises the successful conducting of military strategic missions in a sustainable manner.

Notwithstanding the recent discussions with the Parliamentary Committees on the desired Future Blue-Print Force Design, both the Force Design and Force Structure that we would prefer remains unaffordable. The big question is what should we do?

This dilemma, and the significant strain placed on the Defence and Defence-Related Industry, and our increasing reliance on foreign manufacturers, puts us in a strategic quandary, with serious implications for the Sovereignty of the Republic.

Is it right that we continue adopt short-term views to fulfil our Constitutional obligations? This only enables us to provide “adequate operational performance” where spending is focused on immediate operational measures.

There can be no doubt that there is a widening dichotomy between that which the SANDF is expected to achieve and the resources that are provided to achieve these expectations. SANDF is being spread so thin.

Our inability to maintain, repair and overhaul our aging fleets of combat equipment simply adds to our already dire block – obsolescence of our prime mission equipment.

  1. The strategic dilemma

Honourable Speaker,

We have unaffordable legacy Defence Systems and Defence Capabilities. We have a bloated facilities footprint and we also have the urgent need to rejuvenate the SANDF with young and healthy soldiers.

We need to develop a view on what level of defence South Africa needs, and what it can afford to maintain at a sustainable level.

To date, we as South Africans, and specifically those who represent us in the Executive and the Legislature, have struggled to come to terms with the most pertinent and enduring question facing the Defence establishment as a whole, which is…“what level of Defence does South Africa need, and what we can afford?”

This is a critical question that must be answered, no matter how difficult it might be. My responsibility as Minister, as charged by Section 202(1) of the Constitution, is to engage with the President, the Cabinet, the Minister of Finance and Parliament on this matter and provide such guidance.

Defence Planning is not a short-term endeavour. It is a multi-year and multi-decade endeavour that must be informed by reasonably sustainable financial parameters. Ultimately, we require a policy decision on what level of Government Expenditure we can sustainably afford to earmark for Defence.

We require a quantum leap of thinking, including a significant discourse on the doctrine and combat capabilities that will be relevant for the future.

In these deliberations we need to appreciate South Africa’s domestic priorities and our international, continental and regional aspirations. The above must also be hinged on the national security risk-appetite of Government.

However, the economic and social realities facing South Africa cannot be ignored. Within these constraints, the focus of the National Defence Force in the short to medium-term will be on the repair, maintenance and overhaul of existing defence capabilities, especially those capabilities required for current operations.

Although we are gravely concerned about our ever-declining resources, we must get the job done with the little that we have.

  1. Future Defence Imperatives

Honourable Speaker,

Within this context, I have identified five primary defence imperatives, namely:

Safeguarding of the Nation through military missions, such as border safeguarding, maritime security, support to the SAPS and other ordered internal operations.

Securing Regional Development through a Peace and Security Capability, which speaks both to the deployment of robust forces and support of the African Union Peace and Security Architecture.

Ensuring Hard Power through the maintenance of a Core Combat Capability to protect the sovereignty of South Africa.

Protecting South Africa’s intangible sovereignty through support to the National Cyber Resilience Initiative and ensuring Defence Digital Protection.

Nation Building through contributions to South Africa’s National Development Imperative through high-impact projects, the development of appropriate future defence leaders, and innovation in approaches to conducting defence business.

  1. The future force orientation and posture

Honourable Speaker,

As I have already stated, the contemporary global security landscape is increasingly characterised by security threats that are both “borderless” and “stateless” in their nature, and which lie outside the capacity and ability of a single Nation-State to address on its own.

This begs the question on how Defence should be optimally structured, organized, equipped and trained to best fulfil these requirements within a constrained fiscal outlook, including a robust discussion on what capabilities, platforms, doctrine and tactics would be most appropriate for future conflicts.

It is crucial that South Africa develops a fit-for-purpose National Defence Force that is agile enough to both physically and intellectually move seamlessly between its traditional mandated tasks and the demanding new environment.

Given the nature, complexity and difficulty of the tasks facing the National Defence Force within a challenging economic climate, the time has come to forge ever closer relationships.

Honourable Speaker,

We find ourselves within a broadened and expanded security paradigm which has a particular emphasis on the well-being of the citizenry.

The State retains the obligation to facilitate, if not create, the environment and the necessary conditions for the fulfilment of human security and economic prosperity. 

The slow growth of our economy has further accelerated infrastructure regression, service delivery challenges and increased social dependence on the State. This has been exacerbated by institutionalised fraud, corruption and criminality.

The 4th Industrial Revolution and concomitant jobless growth has also impacted on our economic competitiveness in challenging global markets. This must be viewed alongside rising youth unemployment, the attendant challenge of providing relevant skills for the future, unequal access to infrastructure, the protracted legacy of Covid-19, protracted looming energy and water paucity adds to our growing domestic insecurity, increase in year-on-year violence, crime and social unrest and rising fundamentalism and extremism.

  1. Positioning ourselves for the future

Honourable Speaker,

We must deliver the best possible value-proposition to Government and the people of South Africa against the defence allocation.

Crucial to the success of the National Defence Force in these complex arenas will be the quality, education and professionalism of its human capital, the deployability of the force, its flexibility in terms of structure and equipment, as well as its ability to function effectively within the complex demands of future conflict.

The approach to future defence planning must be capability-based, to ensure greater effectiveness and improved jointness in the National Defence Force. The focus must also be on the Personnel, Organisational, Sustainment, Equipment and Facilities dimensions of Defence.

I therefore require the Chief of the National Defence Force to:

  • Implement a realistic JOINT CAPSTONE CONCEPT for the Defence of the Republic of South Africa and to evaluate our suite of key defence capabilities and systems for their future relevance.
  • Align the doctrine, training and resource management approaches and systems within the JOINT CAPSTONE CONCEPT.
  • Develop a sustainable and well-functioning military organisational structure aligned to the JOINT CAPSTONE CONCEPT.
  • Improve vertical and lateral coherency in Command and Control to command, direct, orchestrate and control the National Defence Force accordingly.
  • Streamline the existing organisational structure of the National Defence Force.
  • The Chief of the National Defence Force must accordingly:
    • Emphasize officership and the command nature of military culture.
    • Prioritise the modernisation of that prime-mission equipment and the phasing-in of off-the-shelf technologies required for the future.
    • Prioritise the maintenance, repair and overhaul of those legacy systems we will need to retain in the interim. 
    • Urgently stop expenditure on, and potentially dispose of, that which we will not need.
    • Establish a significantly reduced leased-facilities portfolio.
    • Examine renewable technologies for refurbished Defence Facilities, as was demonstrated recently at Air Force Base Hoedspruit.
    • Rejuvenate the personnel component to deliver professional and competent leaders and tough and disciplined soldiers.

The backbone of the successful National Defence Force is an effective and efficient sustainment system. The National Defence must review its sustainment practices to deliver maximum output with fewer resources.

In the immediate-term, the Joint Force Employment Requirement must be re-assessed to ensure that urgent operational requirements are met.

Honourable Speaker,

Notwithstanding the above direction I have given to the Chief of the National Defence Force, I further require an urgent and detailed military appreciation of what it will take for the National Defence Force to assist the citizens of South Africa with man-made and natural disasters in the future.

I require this assessment urgently so that I can engage with Cabinet and Parliament on this matter.

I wish to direct the expansion of the Military Engineering capability as a repository for the Disaster Management Capability of the National Defence Force. This should not only include matters of equipment, but must extend to matters such as planning, simulation, distribution systems and collaboration with other actors in the National Disaster Space.

  1. Cost of employment

Honourable Speaker,

The Compensation of Employees portion of the budget is a grave priority area which must be addressed. Upon my appointment as Minister, I discovered a bloated top-structure and a lack of rejuvenation in the bottom and middle components of the Department.

The Department must reduce cost-pressures on the Compensation of Employees portion of the budget. To this end, we have developed a revised strategy by which we seek to fit in with the Compensation of Employees allocation over the MTEF and MTSF period.

The National Treasury has allocated one billion rand (R1bn) to fund the Mobility Exit Mechanism during FY 2022/23 and eight hundred million (R800m) FY 2023/24 in order to assist us in fitting in with the Compensation of Employees allocation.

Simply put, we need to retire more senior staff and recruit more young and agile people. I thus require the Department to advise me on who must stay and who must exit the system. I require this information for my engagements with the Ministers of Finance and Public Service and Administration.

We must be in a position to communicate this simply and efficiently within the Department and the people of our Nation. It might be useful to note that I have given specific directives to the Secretary for Defence and the Chief of the National Defence Force to overhaul the communication system. Communication must henceforth be coordinated and coherent.

Honourable Speaker,

The current state of equipment and facilities can, in many instances, be ascribed to questionable leadership and poor decision making. These tarnish the image of the National Defence Force. Similarly, when attending the DIRCO Heads of Mission Conference in April 2022, I received many complaints from our diplomatic fraternity about the performance of our Defence Attaché corps.

The appointment and promotion of competent, dynamic and enthusiastic soldiers and employees to leadership positions and critical posts is a priority that I will be insisting on during my tenure as the Minister of Defence and Military Veterans.

I require an urgent review of the practices and criteria used by the National Defence Force to recruit, select, appoint, promote and place its Members. I further require a review of the current timeous and cumbersome process to recruit, select and appoint Public Service Employees in the Department.

I also place great emphasis on the training of the future leaders in financial management practices.

  1. Governance imperatives

Honourable Speaker,

I have directed the Secretary for Defence to strengthen the Defence Secretariat so as to enhance governance in the Department, as well as to provide the necessary support I require as the Executive Authority.

I am seriously concerned about irregularities and corruption in our procurement system. If there was anything that we need to fix urgently, it is procurement.

I am alarmed about the number of audit qualifications in the Department of Defence, as well as the number of reports of illicit activities, fraud and corruption that are coming to my attention. This cannot continue unabated. The Governance and Accountability Framework and Systems in the Department has to be overhauled.

I remain concerned about the state of financial and resource management in the Department. We need to demonstrate to the Auditor General of the Republic of South Africa, the Department of Public Service and Administration and the National Treasury that we are very serious about the way we go about our business. They are our key stakeholders in the conducting of Defence Business, and we must demonstrate to them good governance, accountability and consequence management within the Department.

I have also raised my concerns about the lack of automated process in the Department, specifically in the procurement and asset management fields.

I require the Secretary for Defence to:

  • Accelerate the acquisition of an Integrated Defence Information Management System that can manage all Defence Resources. Such systems are available in the market and can be tailored to our requirements.
  • Institute a high-integrity procurement system to break with the fraught system we currently have. It must have the necessary impartiality, checks and balances required of modern procurement that can guarantee value-for-money and which can meet urgent military operational requirements.
  • Interrogate all instances of irregular, wasteful and unauthorised expenditure and institute appropriate consequence management.
  • Revisit and repurpose all delegations in the Department so that Programme Owners and their subordinate commanding officers and/or managers are held to account for the resources allocated to them.
  • Interrogate all other reports of misconduct, both departmental and criminal, and institute consequence management where appropriate, to the extent of preferring criminal charges against perpetrators. This must extend to both civilian employees and uniformed members.
  1. Resource Efficiency Imperatives

Honourable Speaker,

The decline in Defence Capabilities forces us to look at prioritising all activities for better efficiency in the quest to achieve our Constitutional mandate. We must apply the principles of minimising, prioritising, right-sizing and optimising to all aspects of the defence organisation.

To this end, I require the Secretary for Defence and the Chief of the National Defence Force to:

  • Review the budget allocation to all budget holders and reassign funding against priorities identified, including a zero-based budgeting system if so required.
  • Continue the reduction of personnel to the Compensation for Employees ceiling allocated, as well as the sustained rejuvenation of the personnel compliment.
  • Conduct cost-saving interventions to achieve value, especially value in the procurement system.

The National Defence Force is highly dependent on a healthy and sovereign indigenous local defence industry.

One cannot ignore the desperate plight of the Defence and Defence Related Industry. This Sector has historically delivered an excellent return on government investment, is currently not only a mainstream industrial manufacturing and development role-player, but is also key to the sovereignty of South Africa and the deep-level support required by the National Defence Force.

The Armscor Board is the Accounting Authority. As the Shareholder Representative, I require them to:

  • Commissioning a hard-hitting, factual and uncompromising economic review of the public and private companies in the Defence Industry.
  • Provide a sober, realistic and unemotional analysis of capabilities and capacities remaining in the public and private components of the industry so that we can make hard choices against an informed base.
  • To suggest measures, interventions and mechanisms that will improve industry support to the National Defence Force.
  • To provide a clear view of the repositioning of the Industry in a manner that enhances the sovereignty of the Republic.
  • To posit a new relationship with the Industry and other stakeholders that ensures the modernisation of the National Defence Force.
  • Investigate how they might assist the Secretary for Defence with instituting wide-ranging reforms in the procurement and acquisition arenas.
  1. On matters Military Veterans

Honourable Speaker,

We continue to be faced with the challenges still facing military veterans and their dependents. In this regard, the disbursement of some of the benefits due to military veterans has not been as smooth as it could have been and we are working on effecting improvements in this regard.

Honourable Speaker,

During this current financial year 2022/2023, we intend to roll out what is an important benefit which will alleviate the plight of the military veterans. This is the military veterans’ pension as stipulated in the Military Veterans’ Act of 2011.  We are finalising the administrative rollout and will later announce the commencement date as well as the military veterans’ pension quantum soon.

  1. Implementation of Ministerial Strategic Direction

Honourable Speaker,

Key to unlocking the above will be leadership at all levels. At the strategic-level:

  • My role as the Minister of Defence is to provide appropriate Ministerial Policy Direction and insightful Policy Guidelines.
  • The Secretary for Defence must enable the National Defence Force through strategic resource allocation and through appropriate governance, compliance, monitoring and reporting.
  • The Chief of the National Defence Force must execute my strategic direction through Strategically Focused Operations, unlocking value for the security of South Africa and its citizens.
  • The Board of Armscor must reposition the Defence Acquisition Agency in a manner that provides strategic support to the National Defence Force and an improved value-proposition for Defence.
  1. Concluding statements

In conclusion Honourable Speaker,

I wish to inform the House and the nation that we will be hosting two premier international events as the defence establishment: firstly, from the 21st to 24th June 2022, we will be hosting the United Nations Partnership for Peace international symposium to showcase our country’s capabilities as one of the leading troop contributing countries in United Nations missions. Honourable Speaker, we will also be hosting the biannual African Aerospace and Defence (AAD) 2022 during September 2022 at Waterkloof Air Force Base. We look forward to your presence in these two events to join members of the international community.

As the Executive Authority responsible for both Vote 23 and Vote 26, I request the Honourable Members to approve the Forty-Nine Billion Ninety Million Rands (R49, 090 billion) that has been allocated to the Department of Defence in terms of Vote 23 and Six Hundred Sixty-Six Million Four Hundred Thousand Rands (R666, 4 million) that has been allocated to the Department of Military Veterans in terms of Vote 26.

I thank you.

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