THE BUDGET & POLICY SPEECH OF THE DEPARTMENT LOCAL GOVERNMENT AND HOUSING FOR THE FINANCIAL YEAR 2004-2005 PRESENTED TO THE LEGISLATURE BY MEC J.L.MAHLANGU ON 28 TH JUNE 2004.

Honorable Speaker Mrs. P. Phosa,

Deputy Speaker, Mr. B. J.Nobunga,

The Premier of the Province, Mr. T.S.P. Makwetla

Members of the Executive Council,

Members of the Legislature of Mpumalanga,

Distinguished guests,

Executive Mayors of the three Districts, Mayors and Councilors of Municipalities, Ladies and gentlemen.

It is an honor and privilege to present to you the budget and policy speech of the Department Local Government and Housing.

On the 14 th of April 2004 the citizens of South Africa clearly articulated their wishes on who should lead government in South Africa. They gave the ruling party the mandate to proceed to deliver on the peoples contract to create jobs and meet basic needs of the people. The women, men and I, Madame Speaker, in the Department Local Government and Housing intend to do just that.

On The 3rd of May 2004 the Honorable Premier T.S.P. Makwetla announced a new Department. It is called the Department Local Government and Housing. This was a merger of Local Government and Housing. The Land Administration component of

old Housing was merged with the Department of Agriculture, Conservation and Environment. Traffic in old Local government went to Roads and Transport. On the 9 th June 2004 the Administrative arm of Traditional Affairs was also added to the new department.

Flowing from the merger, the new department drafted a new Organogram. This organogram will hold until the end of the Financial Year 30 March 2005. The merger process progressed relatively well amidst the Political Committee and Labour alike closely providing the much-needed guidance and advises where necessary.

ADMINISTRATIVE AND CORPORATE SERVICES

The overall challenge is developing a common departmental culture and work ethic from the newly merged three units. We need to provide the necessary resources, staffing and capacity building of the new incumbents. These programs will include the implementation of the Learnership Program in the Department, as well as facilitate the orientation and adjustment of the Community Development workers.

Madame Speaker, the merger of the three components leads to a creation of a formidable structure that will inclusively build on all the people of the province. Abaholi Bethu Bendabuko in a wall-to-wall receptacle of Local and Government will jointly with the Department creatively respond to the basic needs of the people in a manner that builds on our culturally diverse heritage and rich value base.

The addition of Traditional Affairs Administration follows closely on the signing of the Traditional Leadership and Governance Framework Act No41 of 2003. This Act suggests that we need an equivalent provincial promulgation. Significant guidance provided by this Act is: a judicial structure to deal with succession disputes and other disputes. Legal Task Teams are preparing the necessary legal frameworks.

LOCAL GOVERNMENT

This Transformation Process is nationally driven. The process comprises of 15 strategic interventions. It is a systematic and phased process, which commenced in the year 2000. The Mpumalanga Province actively participated in the process. Madame Speaker, our provincial's performance in this process demonstrates a commitment to develop and grow. Sound foundations have been set and building blocks are in place.

INTERGOVERNMENTAL RELATIONS:

Madame Speaker, we are taking the cue from the spirit of intentions in the Intergovernmental Relations Bill and Framework. The Province will utilize the national guidelines to developmentally build sound relations within the various spheres of government. This is a concerted action, aims to:

•  Proactively build a strong Local Government sphere and enhance its status to deliver services within a stable well managed cooperative government framework;

•  Strengthen the existing base of structures to achieve sound and financially viable Local Government with stable institutional, administrative and information technology systems.

•  Improve, accelerate and extend the initiated roll out of free basic service delivery and local economic development; and

•  Deepen local democracy and accountability ensuring the capacitating of ward committees. To this end workshops to build capacity of ward committees have been initiated. The Community development workers will add value to this process.

ACCOUNTABILITY SYSTEMS, GOVERNANCE AND ANTI CORRUPTION

The recent negative publicity at Local and District Municipal level demonstrate a need to establish a strong provincial developmental support structure for municipalities. The MUNIMEC System (Municipality and MEC's Forum) will be utilized as a method or vehicle to provide pertinent leadership, policy information sharing and thereby provide direction on critical governance matters.

Madame Speaker, my Department has started implementing this developmental approach. A Monitoring and Evaluation information and technology system was piloted in some of the municipalities. The lessons learned suggest a need to roll out this M & E IT system in phases into all municipalities over a next two - year period.

This diagnostic tool will be followed by the dedicated response

“ Ukulungisa Kuqonde Support Team” that will be set up by the end of December 2004. This Team will be able to come into a municipality, follow up on the issues raised by the diagnostic tool and put in place corrective measures. The lessons learned in two ventures managed to put the much-needed capacity that improved

revenue and stability at Dipaleseng and at Ehlanzeni. We will continue to consolidate these gains. This is going to be a dedicated permanent team.

The Department is committed to the elimination of corruption. We will be enhancing sound systems of accountability in all structures within the province. We are acting on all the identified forms of corruption and are adopting a developmental approach to capacitate all our structures on sound governance practices. The full implementation of the Code of Conduct for Public servants is one of the initiatives. Increased contact with senior leadership at Municipal level both administrative and political will enhance the plan to rid us of this negative element.

SERVICE DELIVERY AT LOCALGOVERNMENT LEVEL

Madame Speaker, the current reality is that free basic services are not reaching people who need it most, namely the previously disadvantaged sectors of our community. The reason is that readily measured water is not assured in the previous homeland areas and sanitation prerequisite infrastructure is not in place. This infrastructure costs a lot of money.

I am suggesting a bold move that will have impact on service delivery. I am proposing that we “bite the bullet” and roll out full water and sanitation district by district over the next five years. Will it not achieve lasting impact if we took the full MIG grant and roll out per district the total water and sanitation program?

While we ponder on this strategy, we will continue with the current plans that cannot be halted because they have commenced. The roll out of free basic services addressing needs through the Municipal Infra-structure Grant (MIG).

DISASTER MANAGEMENT SERVICES

Madame Speaker, the province will deliver on Disaster management services in compliance with National Policy. Plans are advanced to deliver the Provincial Disaster Management Center in the province and the roll out of the provincial framework and guidelines that will assist every municipality to develop its own disaster response program.

CAPACITY BUILDING AND TRAINING PROGRAMS;

Numerous capacity building initiatives are taking place: The Norad initiative enabled us to pilot the I.T. Diagnostic tool; workshops are taking place on the Municipal Finance Management Act. This will ensure sound financial management; Disaster Management; The roll out on MIG and Community Development in Mpumalanga and The Presidential Strategic Leadership Development Program,

INTEGRATED SUSTAINABLE RURAL DEVELOPMENT PROGRAMME

Madame Speaker, we are reporting mixed successes on this program. Our housing delivery in the nodal points meant that we delivered services that are tangible in Greater Marble Hall and Greater Tubatse Districts. The feasibility study in Sekhukhuni is complete. This report will go a long way in ensuring that comprehensive planning takes place guiding future developments in this region. The Bohlabela study experienced undue delays. The housing approaches of building where people are meant that more people in rural areas are now served with housing delivery.

COMMUNITY DEVELOPMENT PROGRAM IN THE PROVINCE.

Madame Speaker, the introduction of Community Development workers to assist with Community participation at local government level will start with 60 participants. Recruitment is at an advanced stage.

LEGISLATIVE AND LEGAL MATTERS

Standard Draft bi-laws will be published in the Provincial Gazette. Municipalities, if they so wish, can adopt these bi-laws as their own. This will facilitate the Billing System. The bi-laws in question are related to: Credit Control, Debt Collection, Cemeteries and Crematoria, Water and Sanitation, Waste Disposal and Electricity.

The Department is also in a process to draft a guide on how to make bi-laws for use by municipalities.

We will be introducing the Mpumalanga Housing Amendment Bill to deal with the inconsistencies between the Housing Act, 1997 and the current Mpumalanga Housing Act, 1998.

For instance the provisions regarding the voluntary and involuntary sale of RDP houses by beneficiaries and municipalities. The latter's sale of housing creates a problem because some of the debts people have for services are not equal to the investment Government made to resolving housing. The people go back to informal settlements. The municipalities may think they are solving a revenue problem, but they are also creating a more expensive problem to manage. Madam Speaker, I am happy to report that we averted such a calamity in a municipality by our speedy intervention.

RENAMING OF BUILDINGS TOWNS STREETS AND RIVERS NAMES

The collaborative initiative between the Department Local Government and Housing, the Department of Culture, Sports and Recreation and the Geographic Names Council will be strengthened in order to assist municipalities to implement names changing initiatives as announced by the Premier in the State of the Province address.

HOUSING

Housing strategy to deliver diverse housing products and services in sustainable human settlements continues through the various

instruments. We aim to deliver products that engender human dignity, by continuing to build “ bigger and better” housing products

on bigger stands. The emerging builder program will be reviewed and evaluated for impact.

THE NEW SUBSIDY QUANTUM

Madame Speaker, it is my great pleasure to announce the increase in the resources for housing delivery. The new quantum of the subsidy is R 25 800 for the year 2004/05 effective from

1 April 2004.

URBAN RENEWAL CHALLENGES: INFORMAL SETTLEMENTS

Madam Speaker and distinguished guests, we have in our province, according to GCIS maps well in excess of thirty-eight Informal settlements in the province. These people do not enjoy the standard and quality of life that fosters human dignity. Informal settlements are going to be the focus of our attention. We will be targeting 3 areas as pilot sites in the Province to conduct research on how to upgrade the informal settlements in conjunction with relevant municipalities and districts.

Madame Speaker, I am urging us to be bold on this strategy. I am inviting sister departments to jointly conduct investigative work, jointly apportion resources for school, social and economic amenities, infrastructure for water, sanitation and electricity at the same time. Madame Speaker, I repeat “ at the same time ” All municipalities of the pilot sites must pass bi-laws that state that once the family has been reallocated or upgraded the shacks must be demolished. If this is done over a period of time, we will succeed to change the landscape of our province. I can hear your chuckles and whispers: what about the foreigner element in these settlements. Indeed what about it. Madame Speaker let us “take the bull by the horns. Let us creatively deal with it.

SOCIAL HOUSING: RENTAL STOCK

Madam Speaker, we continue to see migration trends from rural areas to urban areas. These are people in search of a better life. The migrants are either South Africans or foreigners from other parts of Africa. This is not necessarily a bad thing. The challenge, however, lies in our readiness to manage it. This requires us to be proactive as a province to deal with the results of migration.

This trend requires us to address shelter requirements of people on the move. Many of these mobile people are in informal settlements with a very poor quality of life, falling prey to deviancy anti social behavior, crime and drugs. Is low cost renting for migrating people not a possible option?

Madam Speaker, I am pleased to report that we have made a start with the rental option at Emalahleni. The Provincial Launch of the Job Summit Project of Emalahleni in the second quarter (pending the availability of the Presidency is our first social housing rental option under the new government.

THE EMERGING BUILDER

The emerging builder program saw in excess of 700 emerging contractors throughout the Province directly benefiting through approved projects under this programme. Given the high volume of the above poses certain challenges both for the Department and for the contractors.

One of the main problems for the contractors is access to building materials as many of them cannot pay upfront for the materials. We are piloting the involvement of municipalities in construction and material acquisition.

The new procurement regime on the other hand provides for municipalities to become developers. We are exploring methods where we can secure material in bulk and save at municipal level. We will naturally pass savings to quality and or size of the house.

Let me hasten to add, Madame Speaker, that this initiative is also a significant step towards municipalities playing an active role in housing. It is a funded project and will enhance the funded establishment of housing desks at municipal level. In this way we will also meet the challenges faced by emerging contractors.

The department has come up with an interim solution through a joint venture account between the contractor and the supplier until we can successfully roll out material acquisition by municipalities. We are creatively exploring all avenues because of our strong commitment to the “people's contract to create employment” The success of these ventures are very crucial if job creation efforts will be undertaken at scale . In this way emerging and youth contractors will have an opportunity to subcontract for construction at the different municipal housing initiatives especially because housing construction will be with us for many years to come.

Madam Speaker, part of our responsibility to transform the construction industry requires that many previously disadvantaged people need to enter this market. We are as a province creating an enabling environment for this to happen.

HUMAN SETTLEMENT REDEVELOPMENT PROGRAMME

This program will be restructured for use in support of our urban renewal program. This is an exciting development because it puts resources in place for us to roll out informal settlement at scale.

SURVEY OF INFORMAL HOUSES

The department has embarked on a major exercise on the survey of all informal houses in the Province. Matriculants are being utilised to undertake the survey. The critical outcome is that we now have significant data on shelter needs in all the wards. This enhances planning on the informal settlements in particular, and will inform housing provision in general.

IMPLEMENTATION PLANS FOR THE 2004/2005

It is expected that the Provincial regulations to the Rental Housing Act will be approved and gazetted shortly. This means the Rental Tribunal will be fully functional and be in a position to receive and effectively deal with landlord/tenant complaints.

THE PEOPLE'S HOUSING PROGRAM

The People's Housing Process (PHP) seeks to ensure that beneficiary participation and capacity build ing in a manner that

Foster economical spin-offs become the core and primary goals of this noble program. It became evident that where there has been active participation and capacity building, this has had observable positive impact on the quality of houses and living conditions.

To enable the Department to achieve the above objectives through the People's Housing Process, and to give effect to its mandate, the Department has evaluated the implementation of this program in collaboration with the National Department and other provinces,

the outcome was that the People's Housing Process Program must be developed to further strengthen the Letsema and Vukuzenzele approach.

Madam Speaker, we can report with pride that the overall decision-making process in each and every PHP project was enhanced and that the role of the beneficiary has become central and key. This is democratisation in action

Key achievements of note of this program are: the equitable allocation of PHP projects in all municipalities the maximum participation of municipalities through their financial and technical divisions, the buy-in of politicians, councillors, civil society organizations and private sector institutions as Support organizations in the program. This optimum support promoted the private / public partnerships, both in the rural and urban areas.

Lastly, housing quality and the level of infrastructure that already exist where PHP projects are implemented, bigger house size became an important indicator of the success of this housing

Instrument. We need to mention that the Public Service Commission, through its report on the evaluation of the National Housing Subsidy Scheme, as commissioned in 2003, has acknowledged the vital role that our Department has played in addressing AIDS related matters through our various programs, of which the People's Housing Process has been sited.

QUALITY ASSURANCE IN HOUSING

We have a direct link with national Home Builder's Registration Council to assist us to improve on the standards and quality of inspection of houses. The rolling out of NHBRC in the province got off to a good start. We are envisaging that all our projects will be enrolled for this purpose.

THE BUDGET OF THE NEW DEPARTMENT:

Madam Speaker, it is my privilege to announce the Budget of the newly merged Department of Local Government and Housing. It is four hundred and sixty eight million and twenty one thousand: R468 021 000 for the financial year 2004/2005.

CONCLUSION

Madam Speaker, may I take this opportunity to extend my appreciation to the Members of the Portfolio Committee, The Head of Department Ms G.N. Sibeko, The Chief Directors, Directors and the full complement of staff in the Department for their support and my smooth orientation to the new department.

I THANK YOU FOR LISTENING.