SPEECH BY MINISTER FS MUFAMADI, TO THE NATIONAL ASSEMBLY, ON THE OCCASION OF THE DEPARTMENT OF PROVINCIAL AND LOCAL GOVERNMENT BUDGET VOTE
21 June 2004
Madam Speaker and
Honourable Members
Exactly a month to the day, President Thabo Mbeki stood before this House to deliver an important statement of government purpose. He committed government to stay focused on the post-1994 trajectory of transforming the social, economic and political base of South African society - of creating a system of government whose foundation and structure would guarantee the provision of public goods in the form of improved living standards and economic opportunities.
Following on the "State of the National Address", ministers proceeded to make concrete and time-bound commitments to accelerate their development and service-provision priorities. These priorities include giving all people access to clean water in the next five years, extending basic sanitation to more than 300 000 households in the coming year, the eradication of the bucket system in all our townships by 2006, and spending over R14 billion in the next 3 years to give all our people access to shelter. In addition, there is a R1,2 billion annual programme, which will focus on bulk electricity infrastructure in rural areas to address the estimated 3 million household backlogs in electricity.
We are able to make commitments of this kind because we have put in place a political system which articulates national goals and supports a policy-making and implementation process that in turn make possible the realisation of these goals. We are able to put before the country, a contemporary balance sheet showing achievements as well as the challenges that lie ahead:
* Whereas in 1994 only 2.6 million people were benefiting from various social grants, by 2003, the number of such citizens had increased to 6,8 million.
* In 1996, 60% of the households had access to clean water. By 2001, the number of households with access to clean water had risen to 85%.
* In 1996, 32% of households had electricity connections. By 2001 the coverage of electricity connections had been extended to 70% of households.
* Whereas in 1994 only 49% of households had access to sanitation, by 2001 the number of households with access to sanitation had risen to 63%.
Critical to sustaining the delivery of services to the mass of the population is the new system of local government that was established in December 2000. With the ensemble of 284 municipalities, over 3,700 ward committees and about 9,000 councillors, the local government sphere should indeed become the provider-of-choice with regard to the delivery of basic services. However, the limited capacity and resources of some municipalities are clearly an obstacle to action, whether in the areas of planning, budgeting, and implementation. Some of our municipalities rest on a deficient human capital base. Thus they fail to implement new strategies of delivery and cost recovery.
The Department of Provincial and Local Government has undertaken a thorough capacity-survey in order to determine the constraints faced by local government in policy design and implementation. This matter is critically important because it bears on our capacity as government to fashion outcomes of our liking under contemporary conditions.
As government, not only do we need to establish more policy coherence among the various dimensions of our work but also, we need to pay priority attention to the technical requirements for good governance. We have identified a number of municipalities that are experiencing a short-term need for an intense, hands-on support. We are assembling a high-calibre team, which will be deployed to work with municipalities to tackle the identified tasks. Since this support is meant to fade out over time, provinces will immediately replicate this process in order to position themselves such that they can continue to support municipalities in their own areas of jurisdiction. For their part, the municipalities concerned will fully embrace this as an opportunity for them to learn by doing.
Madam Speaker, the intervention we speak of will ensure a more proficient use of resources derived from nationally raised revenue, to benefit the indigent and to operationalise government policy on the provision of basic services. We seek to make local government more dependable as an enabler for provincial and national departments to realise their development and delivery targets.
Madam Speaker, four months ago, this House passed legislation on Property Rates. The legislation is aimed at the progressive nurturing of the solvency of our municipalities and helping define their development strategies. We know that some in our communities have been trying to create confusion as to how the new law will impact on ratepayers. Consequently, the department is currently working on guidelines, which will help municipalities to implement the Property Rates Act. Councillors must use these guidelines to generate municipal-wide dialogue in order to ensure that those who seek to create unnecessary misunderstanding within our communities do not succeed. The guidelines will be issued within the next three months.
As honourable Members are well aware, in February this year, the Minister of Finance announced an allocation of R47, 3 billion to the local government sphere over the next 3 years. The single biggest tranche of this amount will be allocated as local government's equitable share of nationally raised revenue. In 2004/05, R7, 6 billion will be transferred to municipalities directly via the Equitable Share Grant. Given the steady maturation of local government, the geography of development and underdevelopment, and the variable municipal capacity to address development challenges, we are undertaking a revision of the intra-sphere equitable share formula. This revision will be finalised in the current financial year so as to ensure that we start the 2005/06 financial year with an allocative pattern, which speaks to conditions as they actually obtain on the ground.
In this financial year, the Municipal Infrastructure Grant will allocate R4, 4 billion to municipalities for basic services and infrastructure investment, increasing to R5, 1 billion in the next financial year and to R5, 9 billion in the 2006/07 financial year. This grant will target the provision of water, sanitation, roads, solid waste, community lighting and other community facilities. The provision of these services and assets will be undertaken within the guidelines of the Expanded Public Works Programme, which has been allocated R45 billion over the next five years. The EPWP allocation includes the R15, 6 billion allocated to MIG. Our goal is to ensure that over 375 000 households benefit through the provision of clean water and that over 300 000 households benefit through access to basic sanitation in the 2004/05 financial year. The Municipal Infrastructure Grant will be launched within the next two months.
The success of our investment in basic infrastructure will enable greater gains to be made in the roll-out of the Free Basic Services programme. This programme is pivotal in extending the social safety net to the most vulnerable in our communities. In 2004 we will aggressively increase the coverage to communities who have not benefited to date. In particular the Department of Provincial and Local Government will work closely with the Department of Water Affairs and Forestry to ensure that we finalise the framework for the roll-out of Free Basic Sanitation by December 2004.
The lack of a uniform approach to identifying and addressing the needs of the indigent is a key factor, which continues to limit the impact of our programmes on the delivery of basic services. To overcome this problem, by November 2004, a national policy on the indigent will be finalised and presented to Cabinet for adoption.
Since 1998, with the aid of the Local Economic Development Fund, the Department has supported hundreds of municipalities in undertaking innovative economic development initiatives. We have instilled a new mindset in tackling the challenges associated with the duality that characterises our local economies in places such as Utrecht, Lamberts Bay, Johannesburg and all the 21 rural development and urban renewal nodes. This year the Department will conclude policy work on Local Economic Development and put forward practical measures, which will strengthen the positive efforts of provinces and municipalities to build robust and inclusive local economies. We shall also be assisting provinces in their efforts to craft Provincial Growth and Development Strategies. These strategies will provide a better framework for a successful implementation of sustainable local economic projects.
Tragically, some of our local economic development efforts were thwarted by the debilitating impact of natural disasters. This occurred in places, which happen to correspond directly with the spatial map of high risk and disaster-prone areas. By the end of 2004 we will have established a national early warning system for disaster management and with the support of provinces we will ensure that all municipalities have Disaster Management Plans as an integral part of their Integrated Development Plans. This step is consistent with the pre-eminence of prevention, which is mandated by our new Disaster Management Act. The preventive approach to disaster management is important because it makes the strategic difference between developmental failure and success.
Another critical priority for this year is the establishment of a coherent and systematic institutionalised capacity building and training programme for the political and administrative leadership of local government. By February 2005, we will launch the Local Government Leadership Academy in partnership with a number of academic institutions throughout the country. This Academy will be a base from which we shall systematically sponsor local government's capacity for innovations that our system of government requires. It is our intention to ensure that the Academy will have trained at least 5000 local government practitioners by March 2006.
Honourable Members
The totality of government's development initiatives is aimed at creating jobs, fighting poverty and charting a sustainable development path. We have situated the critical role of local government in contributing towards these objectives.
As indicated earlier the progress that we have made since 1994 was based on conscious policy choices and trade-offs. This government deliberately chose to expand the coverage of our social safety net since 1994. In expenditure terms, our social spend increased from R10 billion in 1994 to R34, 8 billion in 2003.
There is a direct causal relationship between the legacy left by apartheid and the development path that we have selected in 1994. However, we need to recognise that this pattern of social expenditure is neither sustainable nor conducive to building national and individual pride within our communities.
The programmes that we have mentioned, such as the Expanded Public Works Programme and the Municipal Infrastructure Grant, will contribute to building a more dynamic allocative and sustainable spending pattern. These programmes are aimed at stimulating the second economy, whilst simultaneously creating a platform for our people to enter into productive economic activity.
In the medium term our focus must be to make our people less dependent on the social grant system and rather to provide them with opportunities to be active producers and consumers in a single inclusive and vibrant economy.
Today, we commit the Department of Provincial and Local Government to playing its mandated role in ensuring that the local government sphere is appropriately positioned to partner with national and provincial government in pursuing the realisation of a sustainable and equitable growth path for our country. We hope that we can continue to count on the active support of the Honourable Members of this House.