SPEECH BY LN SISULU MINISTER OF HOUSING TO THE NATIONAL COUNCIL OF PROVINCES AT THE OCCASION OF THE TABLING OF THE BUDGET VOTE FOR THE DEPARTMENT OF HOUSING FOR THE 2005/06 FINANCIAL YEAR

Chairperson,
Members of the Provincial Legislatures:   

When in the early 1980s a different South Africa was at the crossroads, a senior official of the apartheid regime, Timo Bezuidenhoud, tendered in his resignation. A man of many talents and wide experience – he had served as a commissioner and a magistrate – in the Western Cape he had been charged of what in the language of the times was termed ‘black affairs’. In 1987 he publicly discussed the reasons for his decision to resign and said that at the time of his appointment into the post the government’s policies had been directed at preventing black people from residing in the Western Cape. He says during his tenure he had realized the solution to the migration of black people lay not in stemming the flow but in allowing space for the ‘controlled self-building’ of shacks. To find land for this purpose he therefore consulted the Minister of Co-operation and Development, Dr. Piet Koornhoof, who in turn went to PW Botha with the request. As Prime Minister, Botha arranged a flight over the peninsula and in this way they came to identify Khayelitsha. And so in conclusion, to help the stay of black people in the Western Cape he gave many and many groups permission to squat. He says nightly, he sat with piles and piles of files. Taking them one by one, he would write ‘approved, approved, approved . . .’   

It would appear to me, Chairperson, that as Bezuidenhoud did this he had taken good advice from those who in the stabilized and freer circumstances that our ten year old democracy presently provide were all too contented to give advice that shacks were a ‘constructive solution’ to the process of rapid urbanization. More fundamentally, he had been allowed to do so by the presence of a mind and the idea that the integration of races within all of South Africa’s living space was not desirable. As such, Chairperson, the landscape of all our provinces tells this outcome of the actions and the policies of not so many years ago.  

In presenting our budget for the financial year 2005/6, therefore, we specifically seek to reverse the consequences of these actions and policies. This house, and indeed, this government will never be able to claim that it is a government of the people if it was not able to do so. It would never be able to claim that it follows the prescript of the Freedom Charter which commands that in a free and a democratic South Africa ‘The people shall govern’ if the results of the actions of the past are not corrected.  

In implementing the prescripts of the Freedom Charter, we have correctly said that these will never be achievable unless we created a state that was in partnership with its people. As represented here, together you form that umbilical that helps us develop our linkages with our people at the provincial level. Thus, this budget is primarily focused on the provinces and municipalities for purposes of collectively achieving our stated objectives.

Firstly, I would like to assure the house that I am extremely satisfied with the progress we have made as a department and the provinces.

We have had a very short year because as you know we spent the first three months working on a new Plan for Human Settlements and then proceeded to work out its implementation plan and re-align ourselves with the Plan. But having said that, our performance has been pleasing. And I can confirm that our MEC’s for Housing have done well.

Except for two our provinces have averagely spent up to 93 percent of their budgets. All things considered this is good news. We are working on ensuring that we can report next year that all our Provinces have spent within the acceptable target. 

In addition, the number of units that have been made available in the 2004/5 financial year amount to 178, 612. The emphasis now is our housing programme is decent houses.  

If we are to effectively begin to reverse the essence of apartheid then we would necessarily have to deal with the residential segregation that was meant to ensure our apartness. Therefore, within the Comprehensive Plan on Sustainable Human Settlements we found it necessary to address the fundamentals that will enable the provinces and municipalities to perform. We have determined that land for human settlements will be well located within easy access to all those amenities that contribute to the social and economic viability of the community. We have therefore identified that the issue of land allocation will be pivotal to the success of the Plan. We would obviously target the acquisition of state land for this purpose. We would require that we audit this land, investigate its suitability and availability for housing. For this purpose we have decided to establish a special purpose vehicle. It is important to emphasise at this point that the Plan is premised on the hope that this will help reverse the trend where low-cost housing was accustomed to be developed on the periphery of cities and towns where there is found limited access to services and social facilities, and where transport costs to employment and retail opportunities are highest. 

It is important that this is given our immediate attention because most of the land we own as a state is in the hands of municipalities and I do not know if any of us here knows what criteria is used by municipalities in disposing of land. We are hopeful that through the Plan we can influence these priorities.  

Secondly, steps are being taken to review the regulatory framework for housing. This is with the view to making it more flexible and responsive to varying local housing development needs and circumstances. The new guidelines will establish policy principles, be flexible and user friendly. To ensure that all stakeholders are accommodated a multi – stakeholder Task Team will oversee the process. Owing to the magnitude of the task to review the whole National Housing Code, a transitional process is being implemented and various guidelines have been developed to guide the key elements of the Comprehensive Plan in the interim.  

Thirdly, the accreditation of municipalities to administer housing programmes will be commenced with through a piloting phase, wherein three (3) Metros and six (6) cities will be accredited in the 2005/2006 financial year. Thereafter, accreditation will be rolled out to all municipalities nation-wide. We see the process as necessary to help municipalities fulfill their political mandates of being the ‘feet of delivery’. In this regard, we commend the steps that have been taken by the Ethekwini and the Ekurhuleni Metros showing keenness to commence with the process as speedily as possible.  

National Treasury has allocated to us an amount of R50 million to proceed with this task.  

Fourthly, it has been necessary to change the institutional architecture for housing delivery. This we did with the purpose to align the roles and responsibilities of the various institutions to the requirements of the Plan. Therefore, in terms of social housing a revised Social Housing Policy has now been prepared. To help achieve the objective of the Plan, in particular with respect to urban regeneration and renewal the new policy will assist in ensuring a housing funding instrument that can be used in urban renewal and the rectification of the social, special, and economic dysfunctionalities of our towns and cities.  

Fifthly, in terms of our social contract contractors will implement a 20 percent allocation for all housing developments which are not entitled to government subsidies. This plan is being finalized with the participation of key players in the construction industry. A further outcome of the social contract concern steps that as government we will be undertaking to ensure that regulations are streamlined and made flexible in respect of the rezoning of land for low-cost housing. 

Sixthly, on a number of occasions we were informed of the need to rectify problems related to the waiting lists as they presently pertain in provinces. In the Northern Cape recently, during the Presidential Imbizo, a number of communities highlighted the difficulties they have in trusting the integrity of the provincial list. These problems are also present in other provinces including municipalities. Given the situation we therefore we took the decision to audit all the waiting lists and to consolidate these into a national waiting list. At the National Assembly on Tuesday we announced that Price Waterhouse Coopers and Nkonki Consortium have been charged with the provision of this credible and comprehensive national housing waiting list. 

Recently, the City of Cape Town completed an update of its own waiting list which currently stands 120 000. I am waiting on other municipalities to follow suit.  

Seventhly, having recognised the difficulties presented to the hard-core poor by the requirement of the R2 479 to pay in a 10 percent deposit we have decided that families falling under this income category will be exempt from the 2 479 rule. We still insist, however, that those earning above should still be required to pay the deposit. Meanwhile, as government we will work on ways in which this can be paid in manageable chunks.    

Eighthly, we revived the Financial Services Charter by signing a Memorandum of Understanding with the Banks. They have pledged R42 billion to be released into the affordable housing market by 2008.        

           In addition, as part of our agreement with the Banking Association, ABSA, FNB, Standard Bank and NEDCOR, we are negotiating a National Home Loan Code of Practice with appropriate sanction mechanisms. We expect this to be finalised by the end of August, this year. 

We are confident, Chairperson, that the Memorandum of Understanding, will benefit those who receive little or no government subsidy including nurses, teachers and the police. The direct result of the agreement, in other words, will be increased access to housing loans and home ownership, subsequently to those segments that were previously excluded. 

To support these initiatives, our legislative programme for the year will include the Social Housing Bill which will assign the responsibilities of the National, Provincial, and Local Government’s, as they pertain to Social Housing, very clearly. In addition, it will ensure that relevant institutional arrangements and capacities required by the National Social Housing Programme are in place including the establishment of the Social Housing Regulatory Authority. The task of the Regulatory Authority will be to maintain a healthy, accountable and effective social housing sector in South Africa.  

The Housing Development Bill will be introduced to put in place a broad framework for residential development; facilitate spatial restructuring and the setting aside of a certain proportion of all housing developments for affordable housing. In addition, between January and March this year, we have transferred a total of R115, 540,000 to the provinces in terms of transfer of payment schedule.  

        The unveiling, Madam Deputy Speaker, of the Comprehensive Plan on Sustainable Human Settlements has indeed ushered in a new period in the development of our urban and rural environments. The Plan is our blueprint for all housing developments; it is our response to the demands of the Freedom Charter. To ensure housing, security and comfort, the Plan has called for the development of new strategies dealing with slums and informal settlements, urban renewal and rural housing development. Thus, in line with our commitment to achieving the Millennium Development Goals we join the rest of the developing world and reiterate our commitment to progressively eradicate slums in the ten year period ending in 2014. An additional funding amounting of R500 million in 2006/07 and R1, 5 billion in 2007/08 has thus been allocated to step up the housing programme so that all informal settlements can be upgraded by 2014. 

    Provincial allocations therefore in this respect are as follows: 

 In partnership with the University of South Africa we have created a Fellowship to be received by those on whom we will from time to time depend to tap on their knowledge. The first recipient of the Fellowship is H.E Tun Daim Zainuddin. Tun Daim Zainuddin served as Minister of Finance in Malaysia and was key in the development of the policy of that country which helped it speedily eradicate slums. In addition, in due course we will have the eminent Peruvian economic Hernando de Soto to also assist us in understanding better and making use of the value that lies within our informal settlements.  

Further, recently, we implemented the decision of the African Union that related to the establishment of the African Ministerial Conference on Housing and Urban Development. At the event South Africa was elected Chair and Kenya a Rapporteur. Other members of the Bureau of AMCHUD are Senegal, Algeria and Chad. As Chair, we have already participated at the recent 20^th Session of the Governing Council of UN-HABITAT that was held in Nairobi as well as the 13^th Session of the United Nations Commission on Sustainable Development that took place in New York. In both forums, we presented the common African position on the eradication of slums relating to the inadequacy of the presently agreed upon slum target that is contained in the Millennium Development Goals, the need for the international community to meet their commitments in respect of finance as well as debt relief and cancellation. We will continue to Chair AMCHUD until 2007.  

South Africa has offered to host the Secretariat of AMCHUD. I would like to thank the staff of my Department for having made AMCHUD such a success. 

I also would like to congratulate Gauteng for spearheading the campaign on title deeds. In fact, I would like to thank all the MEC’s of Housing in the Provinces, those who are present and those who might have been changed to new posts for the enormous contribution they have made in bringing us this far since the unveiling of the Comprehensive Plan on Sustainable Human Settlements. Their efforts have made my burden so much easier. I would also like to congratulate MEC of Housing in Limpopo Maite Nkoana-Mashabane for taking the bull by horns when she accepted the report on maladministration within her Department. She thereby insisted on good and clean governance, something that will all must be proud of. This, therefore, was the necessary first step.

I thank the banks and the Banking Association, Cas Coovadia, Bob Tucker. I thank the executive of the Institute of Housing in South Africa for all their support. I hope our relationship will continue and grow. I also than Keith Kenneth for the wonderful work on the N2 Gateway Pilot Project.  

    Allow me to reiterate therefore that our collective success means a better life for the vast majority of our people. History is on our side!        

I thank you.