Honourable Chairperson
Minister and MECs
Chairperson of the Select Committee Hon. Pat Sibande Honourable Members
Distinguished guests
It is always humbling to be given an opportunity to account to the people of South Africa through this August House which deals with matters pertaining to provinces.
Chairperson, I take great pleasure in presenting to you the 2011/12 Budget Vote.
Of great importance Mr Chairperson is that this month is the month of the Youth and thus make it befitting to remember the young heroes who sacrificed their lives for the total freedom of this country. We remember Hector Peterson and Kalushi Solomon Mahlangu who on his way to the gallows uttered the following words “mama do not cry, tell my people I love them and that my blood shall nourish the tree that shall bear the fruits of freedom”.
Fellow South Africans, we have an obligation of making sure that these words of wisdom and bravery are not in vain.
In the memory of these heroes and many others we will continue to triple our efforts in our quest of ensuring service delivery, but most importantly the provision of shelter to the homeless doesn’t just remain a dream but becomes a reality.
The President of the Republic, Mr Jacob Zuma made the following observations during his State of the Nation Address in February this year: “Whilst many South Africans celebrate the delivery of houses, electricity or water, there are yet many others who are still waiting. The legacy of decades of apartheid under-development and colonial oppression cannot be undone in only 17 years”.
Subsequently, Finance Minister Pravin Gordhan during his budget speech stated the following: “Total spending on housing, water, electricity, community amenities amount to R122b for 2011/12 rising to R138b in 2013/14”.
The period under review
The President and Minister signed a performance agreement – Sustainable Human Settlements and Improved Quality of Household Life – otherwise known as Outcome Eight which encompasses the following outputs:
- Accelerate delivery of housing opportunities
- Access to basic services
- Effective utilisation of land, and
- Improved property market
Let’s briefly deal with each of the above.
- Accelerate delivery of housing opportunities
Regarding the upgrading of imijondolo / slums, 1 100 of these have been identified for upgrading, out of the 2700 that exist countrywide. The formalisation of 206 of these informal settlements has been completed. A further 335 are in the pipeline.
The National Upgrading Support Programme is currently being rolled out to ensure that 49 municipalities have the necessary capacity.
South Africa’s population is just under 50 million more than half of which is urbanized. Our strategy on urban planning and development is therefore undergoing a radical shift in order to adequately respond to urbanisation.
Many job seekers in urban areas are not looking to stay in a permanent home but are seeking rental accommodation. Thus there is an increased demand for affordable and well located rental accommodation.
We have developed a project pipeline with a mix of public- private sector rental stock.
The following are examples:
- The Umlazi community rental unit programme in KwaZulu-Natal (KZN)
- Brooklyn social housing programme in Cape Town known as the Drommedaris
- Amalinda institutional housing subsidy in Buffalo City
- Morgens Village housing project in Mitchell’s Plain
- Emerald Sky in Buffalo City
- The Cavendish Inner-city private sector rental in Johannesburg
- Small scale private rental stock for backyard dwellers in Zola Township, Gauteng.
All of these are aimed at creating 80 000 rental opportunities by 2014. The leadership of the Social Housing Regulatory Authority (SHRA) established last year, must continue to play a key role in all these efforts. A great deal is expected of the Board of SHRA.
It is important to note, under this deliverable, that all the South Africa’s metros with two district municipalities have recently been accredited to drive human settlements’ projects. This means that, for the first time ever, funds will be directed straight from the national department into the coffers of these municipalities respectively: they include
- City of Johannesburg
- City of Tshwane
- Ethekwini Metro
- Ekurhuleni Metro
- Nelson Mandela Metro
- City of Cape Town
- Francis Baard and Pixley Ka Seme district municipalities in Northern Cape
Improve access to basic services
Regarding the improvement of access to basic services, we play a supportive role to the Department of Cooperative Governance and Traditional Affairs, in the provision of basic services such as water, electricity, refuse removal and sanitation.
Effective utilisation of land
According to our mandate, the department is expected to acquire 6250 hectares of suitable land by 2014. On a positive note through our institution the Housing Development Agency (HDA) the department has already achieved this target long before 2014. Beyond this, more than 20 000 hectares of land for suitable housing have been identified by the HDA.
Improved property market
By November 2010, the department received overwhelming support in the form of proposals to implement the R1 billion guarantee from many private sector stakeholders. I want to thank all contributors for their submissions.
The department found merit in each proposal whilst many were useful we opted for the Mortgage Default Insurance (MDI) as its Core Implementation Strategy. This
Insurance has a strong potential to contribute towards the attainment of the 600 000.
It is envisaged that the mortgage insurance product will be available through the banks, as from April 2012. I would therefore urge National Housing Finance Corporation and the banks to accelerate delivery of affordable houses in terms of the Memorandum of Understanding (MOU) they have concluded.
Increasing the accessibility and affordability of home ownership can help stimulate the construction sector which will provide the much needed jobs. This resonates with our economic policy-the New Growth Path.
The material suppliers are cautioned to contain the cost of their products and to avoid any form of collusion which promotes anti-competitive practices.
Home builders particularly the poorest of the poor cannot and should never be exploited.
We have established our delivery and accountability structures, in the form of the Human Settlements Implementation forum. Human Settlements is the coordinating department. Other participating stakeholders are:
- Water Affairs
- Rural Development and Land Reform
- Public Enterprises
- Cooperative Governance and Traditional Affairs
- South African Local Government Association
- Provinces
- Accredited municipalities
In relation to the target of approximately 200 000 subsidised houses and housing opportunities, the provinces, despite some major obstacles, have already spent 98% of the funds allocated to them.
Our campaign to “follow-the-money” helped us to be watchful on expenditure trends throughout the year. This applies to both the operational and capital expenditure.
Procurement
An investigation into procurement in the department is also currently underway with specific emphasis on overpayments to suppliers. In one of the cases under consideration, the supplier admitted to overpayment and has opted to pay back the department an amount of almost R 300 000.
Whilst this is applauded, such a situation should not have occurred in first place. It is important that invoices and payments should be synchronized. Nothing must deter us from fighting and rooting out corruption wherever it manifests itself. Our resolve remains firm.
Eighty percent / twenty percent split of the Human Settlements Development Grant
As from 1 April 2011, the national Human Settlements budget is allocated in an
80/20% split. Eighty percent to the provinces and twenty percent directed from national level on for specific interventions. As a start, the following projects have been identified as National Priority interventions funded from the 20%.
The project details are as follows:
1. Duncan Village - Buffalo City Eastern Cape.
2. Lufereng, Sweetwaters, Khutsong and Diepsloot – Gauteng.
3. Cornubia - Ethekwini KZN
4. Lephalale around Medupi station - Limpopo
5. Drakenstein – Western Cape
The investment being made in all these intervention areas is to the tune of R886.091 in 2011/12 and R1 billion in the outer year.
Budget focus for 2011 to 2013
The budget for 2011/12 has increased to R22.5 billion, a 38 per cent increase from
2010/11 and is expected to grow to R26.6 billion in 2013/14. Over the 2011 Medium Term Expenditure Framework (MTEF) period the conditional grant to provinces grows from R14.7 billion in 2011/12 to R16.2 billion in 2013/14.
The housing disaster relief grant is being discontinued in 2011/12 which was utilised to facilitate housing assistance in emergency situations. Over the 2011 period an amount of R1.2 billion has been provided to fund the Rural Households Infrastructure grant to provide specific capital finance for the eradication of rural sanitation backlogs targeted at current households without access to sanitation and water.
National Treasury has provided funding for a new grant, namely the Urban Settlements Development grant for cities which will allow eight metropolitan municipalities to improve efficiency to maximise the development outcomes and achieve a coordinated approach to the built environment management. Over the 2011 MTEF period amounts of R6.4 billion (2011/12), R7.6 billion (2012/13) and R8.3 billion (2013/14) have been allocated to this grant.
The department’s main cost driver remains the Human Settlements Development grant together with the new Urban Settlements Development grant for cities. In respect of these grants, the total allocation of R21.2 billion in the 2011/12 financial year represents about 94 per cent of the department’s total allocation.
This vision speaks of deracialising our society. The idea is to build social cohesion within communities. As Human Settlements we have moved away from a delivery model that focuses on numeric target alone. Towards an outcome approach in the creation of sustainable human settlements and improvement of quality of each housing unit we produce. Minister and I have just returned from Limpopo where through just merely volunteering, the youth demonstrated that with their involvement in housing a lot of people can have adequate housing and sustainable lives. In only three weeks, they built 76 houses of top quality. It was humbling to discover that some of those beneficiaries were over 100 years old who can no longer walk. With the houses built to suite their disability as a result of old age they also received wheel chairs.
Allow me Chairperson to thank all stakeholders who made this youth build a success. National Youth Development Agency, African National Congress Youth League, Young Communist League, Non-Governmental Organisations, the unit with the department and all volunteers.
I wish to thank the department of Limpopo for agreeing to place volunteers within projects for the next 18 months.
I thank you
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