nkandla - correspondence from president of the republic on investigation into allegations of...
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ANNOUNCEMENTS, TABLINGS AND COMMITTEE REPORTS NO 49 ─ 2016
No 49—2016] THIRD SESSION, FIFTH PARLIAMENT
PARLIAMENT
OF THE
REPUBLIC OF SOUTH AFRICA
ANNOUNCEMENTS,
TABLINGS AND
COMMITTEE REPORTS
FRIDAY, 22 APRIL 2016
TABLE OF CONTENTS
ANNOUNCEMENTS
National Assembly
1. Correspondence from President - reprimands to Ministers .................. 1
COMMITTEE REPORTS
National Assembly
1. Tourism ................................................................................................. 6
2. Justice and Correctional Services ....................................................... 29
3. Public Enterprises ............................................................................... 47
ANNOUNCEMENTS
National Assembly
The Speaker
1. Correspondence from President - reprimands to Ministers
(1)
Correspondence from President of the Republic on investigation
into allegations of improper or irregular conduct relating to
security upgrades at Nkandla – reprimands to Ministers.
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COMMITTEE REPORTS
National Assembly
1. Report of the Portfolio Committee on Tourism forBudget Vote No. 33: Tourism, dated 21 April 2016
The Portfolio Committee on Tourism, having considered Budget Vote No.
33: Tourism, together with the Strategic Plans and Annual Performance Plans
of the National Department of Tourism (NDT) and the South African
Tourism (SAT), reports as follows:
1. Introduction
The Constitution of South Africa (Act No. 8 of 1996) recognises that
Parliament has a significant role to play in overseeing the performance ofgovernment departments and public entities. In terms of section 10 (c) of the
Money Bills Amendment Procedure and Related Matters Act (Act No. 9 of
2009), strategic plans must be tabled in Parliament after the adoption of the
fiscal framework. This being the second year of the implementation of 2014 -
2019 Medium Term Strategic Framework (MTSF), the Department and South
African Tourism tabled their five-year strategic plans and annual performance
plans for 2016/17. The Department of Tourism therefore complied with the
provision of the Act as the strategic plan and annual performance plan were
tabled within the stipulated period. This is commended as it gave the
Committee ample time to go through a due process of considering these
documents.
It is imperative that the Strategic Plan and Annual Performance Plan of the
Department are to government priorities and policies. This is emphasised in
the Public Service Commission (PSC) report on evaluation of department
annual reports as an accountability mechanism. The PSC stipulates that the
emphasis on measurable objectives, which should be part of the strategic
plan, is to create a contract between Parliament and the relevant Minister
regarding specific deliverables for which the Minister can be held
accountable. The strategic objectives of the Department are therefore
important to ensure that the budget appropriated for tourism is utilised
effectively and efficiently. This accentuates the significance of the process of
considering the budget and strategic plan in the calendar of Parliament, and
the necessity for departments to table these instruments on time to ensure
Parliament is provided with information required for its oversight work.
In line with the oversight mandate of the Committee, this report provides the
scrutiny of the Strategic Plans; Annual Performance Plans; and budgets of
both the National Department of Tourism and South African Tourism with
regard to their alignment to government priorities and the National
Development Plan.
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2. The Committee process
The purpose of Vote No. 33 - Tourism is to promote and support the growth
and development of an equitable, competitive and sustainable tourism sector,
and enhancing its contribution to national priorities.
The national budget with the Estimates of National Expenditure (ENE)
detailing the appropriated budget for Vote 33-Tourism was tabled in February
2016. This was followed by the Department and South African Tourism
tabling their Strategic Plans and Annual Performance Plans, which provides
specific deliverables and targets for 2016/17 on the 10th
March 2016. These
oversight instruments were subsequently referred to the Committee for
consideration and report on 16 March 2016. The extended briefing sessions
were scheduled for the National Department of Tourism and the South
African Tourism to proffer to them an opportunity of presenting their
strategic plans, annual performance plans and budgets respectively.
Prior these engagements, as part of the review process, the Committee had an
opportunity to engage the Office of the Auditor-General (AGSA). This
meeting was aimed at providing the Committee with audit insights on the
interim review of the Department’s draft annual performance (APP) in order
to add value and enhance the oversight work.
The Committee then extensively engaged the South African Tourism, later
referred to as SAT, on the 8th
April 2016, and the National Department of
Tourism, later referred to as the Department, on the 14th
April 2016, on their
strategic plans and annual performance plans. The Committee engagements
simultaneously reviewed the past performances and interrogated plans for
future implementation.
3. The National Department of Tourism
The Department aims to promote and support the growth and development of
an equitable, competitive, and sustainable tourism sector in order to enhance
the Department’s contribution to national priorities.
3.1 The policy environment
In the State of the Nation Address (SoNA) 2016, a continued emphasis was
placed on active monitoring and accountability measures on infrastructuralprojects and marketing of South Africa as a preferred destination. This is a
welcome development as the Department had also struggled in the past to
effectively monitor infrastructural projects implemented as part of the
Expanded Public Works Programme under the Social Responsibility
Implementation (SRI) Programme. More intense oversight on these projects
would greatly assist the Department in ensuring that projects are completed
within the given framework, and has the desired impact in terms of job
creation. Challenges in the past included amongst others: incomplete projects;
poor workmanship and poor project management which resulted in criminal
charges filed with the South African Police Service (SAPS). The
pronouncement on the importance of monitoring and accountability measureson infrastructural projects will further insure that recommendations of
forensic reports are taken into consideration and fully implemented.
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It is noteworthy that a portion of the seven billion earmarked for new port
facilities will also be highly beneficial to cruise tourism and has a potential to
increase tourism revenue generation. Oversight visits undertaken by the
Committee has consistently outlined the lack of infrastructure in some
provinces as the biggest hurdle towards ensuring that the country’s tourism
potential is realised.
The policy uncertainty with regard to immigration regulations has also
negatively affected the tourism sector. A progressive policy shift in this
regard is welcomed by the Committee whereby the Inter-ministerial
committee on Visa regulations has made notable concessions such as:
• Capturing of biometrics at ports of entry, starting with a pilot at OR
Tambo, King Shaka and Cape Town airports;
• Introduction of an Accredited Tourism Company Programme
(ATCP) for countries like China, India and Russia;• Consideration of a long-term Multiple Entry Visa for a period
exceeding three months, up to three years, for frequent travellers (for
business meetings), business people and academics;
• Letters issued by principals confirming permission for children to
travel on school tours; and
• Extension of the validity of the parental consent affidavits to six
months.
The Department has identified key priorities in line with the New Growth
Path (NGP), the current SoNA, and the National Development Plan (NDP).
Since tourism is one of the priority sectors in the NGP and the NDP, theDepartment is implementing interventions that seek to ensure that their
activities are well aligned and lead to desired outcomes.
3.2 Strategic goals
The strategic goals over the medium term as identified by the Department are
as follows:
• Ensure economic, efficient and effective use of departmental
resources.
•
Enhance understanding and awareness of the value of tourism and itsopportunities.
• Create an enabling legislative and regulatory environment for
tourism development and growth.
• Contribute to the economic transformation in South Africa
• Accelerate the transformation of the tourism sector
• Facilitate tourism capacity-building programmes.
• Diversify and enhance the tourism offerings.
• Provide knowledge services to inform policy, planning and decision-
making.
•
Develop new source markets.•
Enhance regional tourism integration.
• Create employment opportunities by implementing tourism projects
targeted at the unemployed.
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These key priorities of the Department are aligned with the key national
priorities which seeks to significantly reduce the unemployment rate,
especially among the young people in South Africa. Through its programmes,
the Department also seeks to tackle the triple challenge of poverty, inequality
and unemployment.
3.3 Spending focus during the Medium Term Expenditure Framework
(MTEF)
The Department carries out its mandate through four programmes, namely,
Programme 1: Administration; Programme 2: Policy and Knowledge
Services; Programme 3: International Relations; and Programme 4: Domestic
Tourism. During the Medium Term Expenditure Framework (MTEF), the
Departments’ focus will be on encouraging domestic tourism and stimulating
transformation. It will develop new tourist attractions, and support rural
enterprises to grow tourism. The budget is expected to grow at a moderaterate over the MTEF period reaching R2.1 billion. SAT’s budget is also
expected to increase by an additional R105 million allocation for 2016/17 for
the improvement of domestic marketing programmes. The expected increase
in domestic trips is 359 thousand from 2.7 million in 2015/16 to 3.05 million
in 2016/17. This is a cause for concern as during the 2013/14 financial year
domestic tourism trips reached 3.1 million without the R105 million cash
injection. It is therefore expected that the Entity would perform better than
preceding years in domestic trips. International tourist arrivals will be
expected to increase from 8.9 million in 2015/16 to 9.05 million in 2016/17.
It is expected that the increase in tourist arrivals will positively contribute
towards the broader objective of growing the GDP and creating jobs.
The Tourism Incentive Programme (TIP) has been created as a sub-
programme under the Policy and Knowledge Services, the Programme will
receive a budget allocation of R575.7 million over the MTEF, and this
allocation is earmarked for the facilitation of market access for local tour
operators and tourism businesses in recognised local and overseas
exhibitions. Some of the projects for the TIP will include assistance towards
the grading of tourism establishments and retrofitting renewable energy
initiatives for sustainable tourism. The SRI Programme is expected to support
the creation of 3 488 full time equivalent jobs in 2016/17, a mere 480 full
time equivalent jobs increase when compared to 2015/16. This, however, isnot adequate seeing that funding for this sub-programme has increased from
R253 million in 2015/16 to R386 million in 2016/17. Table 1 shows the
programme allocation for the Department of Tourism’s budget.
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Table 1: Programme allocation
Source: National Treasury (2016) – Vote 33 Tourism
4
Programme Analysis
The activities of the Department of Tourism are organised in the following
programmes:
4.1 Programme 1: Administration
The purpose of this programme is to provide strategic leadership, centralised
administration, executive support and corporate services. The budget
allocation to the Administration Programme is for strategic leadership
management and support services to the Department. The total
Administration budget has increased from R233.7 million in 2015/16 toR237.5 million in 2016 as indicated in Table 2. However this represents a
nominal increase of 1.6 per cent, a decrease of 4.67 per cent in real terms.
This Programme constitutes 11.82 per cent of the Department’s total budget,
most of which will be spent through the Corporate Affairs sub-programme
which accounts for 65.9 per cent of the Administration programme, this sub-
programme’s role is to enhance management oversight to create an enabling
policy and legislative environment.
Table 2: Budget allocation for Programme 1
Programme Budget NominalIncrease /
Decrease
in 2016/17
RealIncrease /
Decrease
in 2016/17
NominalPercent
change in
2016/17
Real Percentchange in
2016/17
R million 2015/16 2016/17
Ministry 36.1 32.4 -3.7 -5.7 -10.25 per
cent
-15.81 per
cent
Management 18.9 19.3 0.4 -0.8 2.12 per cent -4.21 per cent
Corporate Affairs 150.2 156.5 6.3 -3.4 4.19 per cent -2.26 per cent
Office
Accommodation
28.5 29.3 0.8 -1.0 2.81 per cent -3.56 per cent
TOTAL 233.7 237.5 3.8 -10.9 1.6 per cent -4.67 per cent
Source: National Treasury (2016) – Vote 33 Tourism
Programme Budget Nominal
Increase /
Decrease in
2016/17
Real
Increase /
Decrease
in 2016/17
Nominal
Percent
change in
2016/17
Real
Percent
change in
2016/17R million 2015/16 2016/17
1 Administration 233.7 237.5 3.8 -10.9 1.63 per
cent
-4.67 per
cent
2 Policy and
knowledge Services
1 181.2 1 272.6 91.4 12.6 7.74 per
cent
1.07 per cen
3 International
Tourism
47.3 54.7 7.4 4.0 15.64 per
cent
8.48 per cen
4 Domestic Tourism 307.0 444.7 137.7 110.2 44.85 per
cent
35.89 per
cent
TOTAL 1 769.2 2 009.5 240.3 115.9 13.6 per
cent
6.55 per cen
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The growth in expenditure for the Administration programme is accounted
for in compensation of employees which accounts for 54.1 per cent of the
programme’s budget. The Sub-programme Ministry has decreased from
R36.1 million in 2015/16 to 32.4 million in 2016/17, the decrease in
expenditure will be on goods and services specifically travel and subsistence
which has decreased from R27.1 million to R8 million.
4.2 Programme 2: Policy and Knowledge Services
The budget allocation for Programme 2 is illustrated in Table 3. The purpose
of this programme is to support sector policy development and evaluation,
research and knowledge management, promotion of transformation, and
responsible tourism.
Table 3: Budget allocation for Programme 2Policy and
KnowledgeServices
Budget Nominal
Increase /Decrease in
2016/17
Real
Increase /Decrease
in 2016/17
Nominal
Percentchange in
2016/17
Real
Percentchange in
2016/17R million 2015/16 2016/17
Policy andKnowledge
Services
Management
6.8 4.7 -2.1 -2.4 -30.88 percent
-35.16 percent
Policy
Development
and Evaluation
21.3 27.7 6.4 4.7 30.05 per
cent
22.00 per
cent
Research and
Knowledge
Management
29.9 26.4 -3.5 - 5.1 -11.71 per
cent
-17.17 per
cent
South African
Tourism
977.7 1 024.8 47.1 - 16.3 4.82 per cent -1.67 per
cent
Tourism
Incentive
Programme
170.5 188.9 18.4 6.7 10.79 per
cent
3.93 per cent
TOTAL 1 206.2 1 272.5 66.3 -12.5 5.5 per cent -1.04 per
cent
Source: National Treasury (2016) – Vote 33 Tourism
The budget allocation for the Policy and Knowledge Services Programme,
which has received the largest allocation in the budget representing 63.3 per
cent of the total Departmental budget decreased by 1.04 per cent in real termscompared to the 2015/16 financial year. This Programme is entrusted with
ensuring strategic policy development, monitoring and evaluation, and
research and knowledge management services. The South African Tourism
(SAT) sub-programme, which is tasked with responsibility of stimulating
sustainable international and domestic demand for South African tourist
experiences, consumes 80.53 per cent of the Programme’s budget. The South
African Tourism Budget will grow at an average growth rate of 5.2 per cent
over the MTEF.
Another noteworthy sub-programme growth is the Tourism Incentive
Programme (TIP), and this sub-programme has experienced an increase of5.72 per cent in real terms. This programme experienced under expenditure
during the 2015/16 financial year of R10 million as a result of unspent funds
due to the delay experienced in the appointment of technical advisors for the
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Robben Island renewable energy retrofitting project. It is not the first time
that the Department lost funds from TIP as during the 2014/15 financial year
the Department lost R78 million from the same programme, which was
redirected to Eskom. The Programme was introduced during 2014/15,
however, the programme did not deliver on the set mandate to help SMMEs
and established businesses to grow through improved market access. Towardsthe end of 2014/15 financial year, TIP was moved to the Policy and
Knowledge services sub-programme and it became fully operational during
the 2015/16 financial year. This is worrisome as the purpose of this particular
programme is not in line with the TIP, it is however better placed within the
Domestic Tourism Programme. It is stated that the programme will support
tourism attractions to enhance destination competitiveness, however the
Estimates of National Expenditure (ENE) highlights that the Department will
develop new tourism attractions. Furthermore underutilised and unutilised
public recreational facilities and resorts will be redeveloped as tourists’
attractions.
4.3 Programme 3: International Tourism
The budget allocation for Programme 3 is presented in Table 4. The purpose
of this programme is to provide strategic and policy direction for the
development of South Africa’s tourism potential throughout various regions
of the world.
Table 4: Budget allocation for Programme 3Programme Budget Nominal
Increase /
Decreasein 2016/17
Real
Increase /
Decrease in2016/17
Nominal
Percent
change in2016/17
Real
Percent
change in2016/17R million 2015/16 2016/17
International
Tourism
management
3.5 4.6 1.1 0.8 31.43 per
cent
23.29 per
cent
Americas and
Western Europe
17.3 20.0 2.7 1.5 15.61 per
cent
8.45 per
cent
Africa and Middle
East
14.4 16.3 1.9 0.9 13.19 per
cent
6.19 per
cent
Asia, Australasia and
Eastern Europe
12.1 13.8 1.7 0.8 14.05 per
cent
6.99 per
cent
TOTAL 47.3 54.7 7.4 4.0 15.6 per
cent
8.48 per
centNational Treasury (2016) – Vote 33 Tourism
The International Tourism Growth Programme is responsible for the
development and support of South Africa’s tourism potential throughout the
various regions of the world. This Programme increased by a noticeable
15.6 per cent in nominal terms from R47.3 million in 2015/16 to
R54.7 million in 2016/17. A significant amount of the International Tourism
budget will be focused on the Americas and Western Europe sub-programme,
as it will account for 36.6 percent of the total programme budget. The
majority of the Programmes budget will be allocated for compensation of
employees at 70.5 per cent as well as travel and subsistence at 9.3 per cent fortrips taken to analyse international tourism markets and attend multilateral
fora. The foreign governments and international organisations (which is the
Regional Tourism Organisation of Southern Africa and the United Nations
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World Tourism Organisation) will account for 11.5 per cent of the
Programmes budget. This Programme will also focus its spending on training
South African missions abroad.
4.4 Programme 4: Domestic Tourism
The purpose of the Domestic Tourism Programme is to provide policy and
strategic direction for the development and growth of sustainable domestic
tourism throughout the South Africa.
Table 5: Budget allocation for Programme 4Programme Budget Nominal
Increase /
Decrease
in 2016/17
Real
Increase /
Decrease in
2016/17
Nominal
Percent
change in
2016/17
Real
Percent
change
in
2016/17R million 2015/16 2016/17
Domestic Tourism
management
10.5 13.8 3.3 2.4 31.43 per
cent
23.29 pe
centDomestic Tourism
management Southern
Region
12.1 14.0 1.9 1.0 15.70 per
cent
8.54 per
cent
Domestic Tourism
management Northern
Region
17.3 15.3 -2.0 -2.9 -11.56 per
cent
-17.04
per cent
Social Responsibility
implementation
253.6 386.1 132.5 108.6 52.25 per
cent
42.82 pe
cent
TOTAL 307.0 444.7 137.7 110.2 44.9 percent
35.89 pecent
Source: National Treasury (2016) – Vote 33 Tourism
The Department’s budget allocation for the Domestic Tourism Programme
has increased by 35.89 per cent in real terms from R307.0 million in 2015/16
to R444.7 million in 2016/17 as indicated in Table 5. This programme is
responsible for the promotion, development, and growth of sustainable
domestic tourism throughout South Africa. The spending focus will mostly be
on the Social Responsibility Implementation (SRI) sub-programme, which
focuses on infrastructure projects under the EPWP programme targeting the
youth, disabled, women, and SMMEs. This sub-programme accounts for
82.6 per cent of the Programme. The expected increase to this Programme
will be highly influenced by the increase in the allocation for the SRI sub-
programme, an increase in the transfers to the Strategic Partners in Tourismand training and development. The expected jobs to be created through the
SRI programme will be 3448 for the 2016/17 financial year.
5 South African Tourism
In terms of the Tourism Act (Act No. 3 of 2014), South African Tourism is
mandated to market South Africa internationally and domestically as
preferred tourism destination and to ensure that tourist facilities and services
are of the highest standard. The organisation is also required to monitor and
evaluate the performance of the tourism sector.
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5.1 Strategic Objectives
The strategic objectives for 2016 – 2021 were summarised as follows:
5.1.1 Contribute to the South African economy by increasing the
number of travellers to and within South Africa.5.1.2 Build positive awareness of the South African experience.
5.1.3 Reposition SA Tourism to be recognised as a tourism and
business events industry leader in market intelligence,
insights and analytics.
5.1.4 Collaborate with stakeholders and partners to deliver on SA
Tourism’s mandate.
5.1.5 Improve visitor experience in line with the brand promise;
and
5.1.6 Create an organisational culture of work satisfaction,
excellence and innovation to improve effectiveness and
operational efficiency.
5.2 Strategies to achieve strategic objectives
South African Tourism has developed seven new strategies aimed at
achieving the set strategic objectives. The seven strategies and measures are
as follows:
5.2.1 Invest in selected markets for leisure tourism to deliver
volume (travellers) and value (tourism revenue).
5.2.2 Position South Africa among the top 10 long-haul business
events destinations by 2025 while collaborating to convertbusiness travellers into leisure tourists.
5.2.3 Revamp the value proposition of tourism grading to inspire
partners and stakeholders to deliver on the brand promise and
quality visitor experience.
5.2.4 Work with trade partners to leverage resources to deliver
travellers to and within South Africa.
5.2.5 Position SA Tourism as the foremost authority in tourism and
business events, underpinned by quality assurance.
5.2.6 Collaborate with partners and stakeholders for tourism
growth.
5.2.7 Create a culture of excellence and innovation to improve
effectiveness and operational efficiency.
5.3 International Tourism Marketing
The world has changed considerably since SA Tourism completed the fifth
portfolio review in 2013. SAT’s fifth leisure tourism market portfolio will be
revised in 2016/17 in line with the current market insights. In order to
effectively and efficiently deliver on its mandate, SAT’s operating model will
be as follows:
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• Adoption of a hub approach – this approach involves clustering
markets into regional hubs for ease of marketing operations and
international trade relations.
• Shift from bricks to mortar to virtual offices – this involves
appointing trade relations managers to service “thin” markets so as
to exploit the gains arising from such markets; and
• General Marketing Agency – this approach focuses on appointing a
marketing agency representative to service markets with high set up
costs and lengthy registration processes.
5.4 Regional Africa Marketing
The National Tourism Sector Strategy identifies the rest of Africa as the main
source of foreign arrivals for South Africa and outlines the tourism goals for
continent, and SAT will pursue the following to unlock the regional markets:
•
Increasing regional awareness of South Africa as a tourism andleisure destination.
• Improving market presence in key African markets; and
• Implementing regional tourism programmes.
5.5 Domestic insights study
SA Tourism commissioned the study on domestic insights to revise the
approach to effectively target the domestic market, thereby growing domestic
tourism and building a culture of travel within South Africa. In order to grow
domestic holiday trips and total domestic direct spend, SAT will:
• Create awareness and travel culture amongst South Africans.
• Motivate the market segments to take more holiday trips by
showcasing a variety of desirable experiences through engaging rich
informative content.
• Partner with and educate the channel to promote relevant VFM deals
with supporting content on activities so that prioritised segments are
motivated to book.
• Promote suitable deals and travel packages to improve affordabilityand seasonality; and
•
Maximise use of and leverage on provincial signature events throughactivations and media engagements.
5.6 Working with Trade
SAT will pursue the establishment of a healthy working relationship and
collaboration with the trade through working with trade partners to leverage
resources that will deliver travellers to and within South Africa. Through
partnerships, the South African brand will be built and trade partners will be
empowered and enabled to sell South Africa in the following manner:
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• Creating awareness and positivity for South Africa as a tourism
destination.
• Initiating an integrated approach between SAT and trade.
• Conducting trade mapping in each market.
• Educating the trade to sell South Africa better; and
•
Using cooperative agreements.
5.7 Business tourism
South African Tourism, through the South African National Convention
Bureau (SANCB) will position South Africa in the top ten long-haul business
events destinations according to ICCA and Union of International
Associations (UIA) ranking. SAT will also collaboratively convince key
decision-makers that South Africa can be trusted to deliver memorable
experiences and successful business events. This will require:
• Reconfiguring of the SANCB to generate more quality association
leads that convert into bids, while focusing on African opportunities.
• Empowering SAT offices abroad to generate leads, offer support and
facilitate incentive-driven business leads to achieve a more
integrated organisation and optimal return on investment.
• Enhancing delegate-boosting platforms to leverage SA Tourism’s
marketing campaigns and expertise, in order to convert the business
events delegates into leisure tourists.
• Repositioning the brand to drive awareness, positivity and
consideration of South Africa as the leading meetings destination in
Africa and an appealing destination for delegates.
• Continuing to explore alternative bid support strategies.
• Generating sales using a sales representation model in some markets
and, in others, direct sales using in-house sales teams; and
• Negotiating with and managing the strategic partner for better
positioning of the Indaba and Meetings Africa events.
5.8 Quality Assurance
The Tourism Grading Council South Africa’s pursuit of enhancing visitor
experience and consumer confidence in the tourism products of South Africawill be achieved by implementing the following:
• Review of policies related to grading. A committee has already beenestablished to undertake the process.
• Drive positive perceptions and the appeal of grading in the industry
by refining the grading value proposition in line with the consumer
insights and associated communication plans per client category,
launching in April 2016.
• Grow the customer base through a targeted sales strategy that
emphasises the grading value proposition in consultation with
industry associations using grading support funding; and• Retain the customer base by delivering the grading value
proposition through a Customer Relationship Framework.
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• Enhance and improve the integrity of the grading criteria and
process. A review of the grading criteria was conducted in 2015/16
to be applicable for further three years.
• Implement globally benchmarked capacity-building and knowledge-
transfer programmes to improve the integrity of the grading
assessors, as well as to ensure optimal transitioning from an
outsourced to an in-house assessor model; and
• Partner with tourism quality assurance bodies, universities, thetourism industry and the Culture, Art, Tourism, Hospitality and
Sports Sector Education and Training Authority (CATHSSETA) to
professionalise tourism quality assurance.
5.9 Stakeholder Engagement
Stakeholder engagement is one of the weaknesses revealed by the SAT
Review Report commissioned by the Minister of Tourism in 2015/16. SATwill strive to strengthen its stakeholder engagement and innovatively align
strategies for tourism growth through:
• The organisation implementing the organisational Stakeholder
Management Plan that will have defined and measurable outcomes.
• SAT together with NDT collaborating with trade on key projects
focused on branding (PR and messaging), marketing, market access,
business tourism and transformation.
• Building a case for tourism as a key pillar for accelerated economic
growth and job creation, both in the short-term and in the long-term.
•
SA Tourism continuing to collaborate with provincial and citytourism agencies on initiatives to improve the seasonality and
geographic spread of travel, drive domestic tourism.
• SA Tourism and the provinces continuing to leverage on Joint
Marketing Agreements (JMAs) and market access platforms both
locally and international markets to find synergies, eliminating
duplications and creating efficiencies in how government funding is
spent.
5.10 Energising and empowering people to innovate for excellence
Tourism is an ever changing sector that requires SAT to be a highly
innovative organisation with motivated staff that keep up with international
trends. To achieve innovation:
• The organisations’ staff complement will remain the cornerstone of
its success. The management and the Board will continue to create
an environment conducive to high performance and excellence.
• SA Tourism will implement a human resources strategy that isaligned to its overall business strategy.
• As part of building an inspiring and energised organisation, SAT
will implement the Leadership Development Programmeunderpinned by an executive mentoring and coaching programme.
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• Culture Alignment Programmes will form part of the full Brand
Ambassador Programme, including training, orientation and re-
orientation as well as new-leader on boarding.
• The implementation of the Brand Ambassador will create a
commonly shared organisation DNA / culture for the effective
delivery of strategies.
• SA Tourism will reconfigure itself to deliver on strategy by
conducting capacity assessment, organisational development and
resource placement.
• Implementing an Integrated Talent Management Plan and a
Succession Planning Programme, including a revision of the
organisation’s remuneration philosophy. This will be underpinned
by workforce planning, staff retention and work skills planning; and
• The focus of all the programmes will be based on the strategic thrust
of re-establishing the organisation as a high performance and
innovative environment and defending SAT as a research-leddestination marketing organisation, while energising and
empowering its people and partners to innovate for excellence and
tourism growth.
5.11 Positioning SAT as the foremost authority in tourism and business
events
To deliver the strategy that positions South Africa as a preferred destination
for leisure and business events, SAT will perform the following activities:
•
Rebrand, expand and resource its strategic research function tomarket intelligence, insights and analytics. Market intelligence and
insights will be taken into account in strategic planning and
decision-making.
• Partnerships with tourism-related and other industries, such as
airlines and airports, will also be forged to ensure that new data
feeds are utilised.
• Expand the partnership with Statistics South Africa to include
domestic surveys; and
• Invest in online and offline platforms for the packaging and sharing
of integrated market intelligence, insights, data reports and analytics
for leisure, business and events and grading.
5.12 Organisational Risk Management
At the time of finalising the Strategic Plan, SA Tourism was embarking on a
risk assessment to identify risks that might have a negative impact on the
achievement of its strategic objectives. This process was concluded by the
end of March 2016. The top three risks identified are as follows:
• Currency loss and increased costs of doing business abroad;
• Possible decline in tourism industry performance; and
•
Lack of assurance over tourism statistical data.
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5.13 Sources of revenue for South African Tourism
The total budget for SAT in the 2016/17 financial year is R1 221 835 billion.
The budget is drawn from the following sources:
•
Government Grant is R1 024 847 billion
• TOMSA Levy is R99 450 million.
• Indaba and Meetings Africa R54 506 million.
• Grading Fees is R20 098 million.
• Sundry revenue is R 22 934 million
6 Committee observations
The Committee synthesised all the presentations received from the Auditor-
General, National department of Tourism into observations that will form the
basis of its oversight programme in the 2016/17 financial year. The
observations outlined below are categorised into service delivery and budget
related matters. Observations are also categorised according to the work of
the Department and activities of South African Tourism.
6.1 Observations on the National Department of Tourism
The observations made in relation to the Department are as follows:
6.1.1 Service delivery related observations
The service delivery observations are based on the non-financial
factors that contribute to the poor performance of the sector. Theseinclude internal factors under the purview of the Department and
external factors beyond its control that should however be coordinated
by the Department.
6.1.1.1 Cooperative governance
The Committee observed that despite good programmes presented to
the Committee from time to time, there were still challenges with
regard to cooperative governance and implementation of programmes
at a local constituency level. These pertain to programmes that should
have been implemented, but there was no progress due to lack ofcooperative governance amongst stakeholders. This mostly affects
attractions such as the Mandela Capture Site in KwaZulu-Natal where
a project was implemented by the Department of Cooperative
Governance and Traditional Affairs in KZN but there is no signage
from the N3 to the site. This was a matter also identified by the
Committee when undertaking an oversight visit to KwaZulu-Natal in
the 2015/16 financial year. The Committee acknowledges that there is
an interdepartmental committee that addresses these issues, but the
concern is that there are no tangible outcomes on the ground. A call
was made to the departmental to address this challenge through the
coordination of activities at a professional level through recognisedstructures such as the Forum of South African Director-Generals
(FOSAD).
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6.1.1.2 Handling of tourism complaints
The Committee observed that in the past financial year the
Department received thirty four complaints and that a bulk of these
were related to issues of refund between the service providers and the
complainants. Some complaints related to consumer dissatisfactionwith the experience related to breach of product promise when the
experience was purchased. The Committee sees this as a far reaching
matter in terms of the mandate and services provided by the Tourism
Grading Council with regard to establishments complying with
offering standards at an appropriate grading status. The Committee
therefore urges the Department and the Tourism Grading Council to
work closely with the trade associations to ensure that their members
ethically deliver on the brand and product promise to meet consumer
expectations.
6.1.1.3
Capacity building in rural communities
The Committee observed that some rural areas have a potential for
tourism development, particularly those adjacent to busy tourism
attractions. However, communities in these areas are observers and
not participants in the local tourism economy as if they are off the
beaten track to tourists. The Department is urged to look into
possibilities of introducing capacity building programmes to involve
local communities, including converting their homesteads to
homestays. It is acknowledged that the Department has undertaken a
benchmarking study tour to Malaysia in this regard and some
communities, such as the Moruleng in Pilanesberg, have startedreaping the benefits. However, the Department is encouraged to roll
out a nationwide programme to reach as many communities as
possible.
6.1.1.4 Planning for projects
The Committee observed that the Department operates in a fluid
multidisciplinary environment and always plans its projects in
partnership with other partners to maximise impact and stretch its
budget. Infrastructure related projects go through a 14 days cycle
which delays inception and commencement of projects. In otherinstances, such as implementation of signage in World Heritage Sites,
the Department had to go through a lengthy process of signing
Memoranda of Agreement that detail responsibilities for various
organisations. The challenge always arises when procurement has to
be done by partner organisations whereby delays are experienced,
thus affecting the implementation and achieving targets set in the
Annual Performance Plan. The Committee is concerned that
continued failure to meet time frames in the Memoranda of
Agreement would result in failure to meet targets in the Annual
Performance Plan thus leading to poor service delivery. The
Department is urged to develop checks and balances to ensure properplanning and implementation of projects.
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6.1.1.5 Marine and Coastal Tourism
The Committee noted that the Department has introduced the Blue
Flag Beaches programme aimed at facilitating the implementation of
Blue Flag Beaches across the coastal cities and towns in the country.
This Committee further noted that this is in line with therecommendations made by the Committee when the Department
tabled the 2015/16 Annual Performance Plan. The Committee had
identified that the Department was missing an opportunity in
leveraging on Operation Phakisa as there was nothing on marine
tourism. The Committee commends the Department for implementing
its recommendations to develop a programme that links to Operation
Phakisa by introducing the Blue Flag Programme. However, the
Department is urged to develop a comprehensive strategy that will tap
into wider marine tourism development opportunities presented by the
almost 3000 km coastline of South Africa. The Committee
acknowledges that the Department will be embarking on a marinetourism consultation process with a number of stakeholders and urges
the Department to facilitate an outcome of a comprehensive and
inclusive Marine Tourism Strategy.
The Committee also acknowledges that the global cruise tourism
industry has increased and cities such as Durban, Port Elizabeth and
Cape Town were planning to increase their participation in the sector
through having dedicated cruise terminals. The type of development
in cruise terminals such as that in the Cape Town Waterfront was
using a mixed model that caters for seasonality as well. It was noted
that the Minister admitted that the Department traditionally did not
consider cruise tourism a priority, and was aware that cruise tourism
was a growing industry. The Committee notes that the Department
acknowledges that this is a short term thinking and cruise tourism
would be investigated, and if found viable, will be one of the priorities
of the departmental strategies.
6.1.2 Budget related observations
The Committee made the following budget related observations with
regard to the Department:
6.1.2.1 Controls on the budget transferred to South African
Tourism
The Committee noted that 83.3 percent of the budget appropriated to
Programme 2 is transferred to South African Tourism. A significant
transfer of more than 50 percent of the SAT budget allocation is
transferred upfront to deal with issues of currency exposure, which
has been a challenge for SAT for a number of years. The Committee
commends the Department and SAT for addressing this issue which
has caused SAT to lose more than R350 million of its marketing
budget in the past five years.
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The Committee recognises that South African Tourism has a new
Board that looks poised to delivering on their mandate in terms of
both strategy and financial management. However, the Department
should have proper controls in place to ensure that the budget
allocated to SAT is used appropriately as it takes a large portion of
funds appropriated to Vote 33: Tourism. The Department should alsoensure that South African Tourism produces and delivers on
marketing strategy that will maximise return on investment from the
appropriated budget.
6.1.2.2 Compensation of employees
The Committee observed that as part of cost cutting measures, the
Cabinet has approved reductions of R17.5 million in 2017/18 and
R26.6 million in 2018/19 to the department’s compensation of
employee’s budget as part of its decision to lower the national
aggregate expenditure ceiling. The Department has also been directedto not exceed 530 employees in its establishment. The Committee
notes that currently the staff establishment is 550 and the Department
has to decide, if posts become vacant, whether to fill or remove them
from the establishment. The Committee is concerned that this might
lead to the Department failing to fulfil its mandate in future if staffing
matters are not handled with care. The Department is therefore urged
to ensure that the critical posts are always filled to effectively and
efficiently deliver on its mandate. The target of maintaining the
8 percent vacancy rate is also highly commended given the high
unemployment rate in the country.
6.1.2.3 Capital assets
It was observed that there was a steep increase in the capital assets of
the Department from R6.0 million, which accounted for 0.3 percent of
the budget of the Department in 2015/16, to R112.3 million in
2016/17 which accounts for 5.6 percent of the budget. This emanated
from the reclassification of the Expanded Public Work Programme
under Programme 4: Domestic Tourism as capital assets. The
Committee notes that this has settled the matter that has been a
concern for the Committee in the past financial years and which led to
the Auditor-General giving an ultimatum for compliance by theDepartment in the 2015/16 or else risk getting a qualified audit.
6.2 Observations for South African Tourism
The Committee observations with regard to South African Tourism include
both the budget considerations and the service delivery environment. The
observations are as follows:
6.2.1 SAT country offices
The Committee observed that the model of operating country offices
has been proven to be expensive and not cost-effective. South African
Tourism is commended for initiating a process of implementing a hub
strategy which will use virtual offices and ensure that one office in the
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region services a number of markets/ countries. The Committee noted
that in the past, country offices have resulted in overhead costs that
tended to gradually increase due to currency exposure. The Hub
Strategy will lead to closure of some country offices and release the
money for the marketing mandate. The Committee urges South
African Tourism to implement the hub strategy to cover as manymarkets as possible to ensure the presence of South Africa globally
and address issues in emerging markets, including watch-list markets.
6.2.2 Relationship of SAT with foreign missions
South African Tourism is commended for training the Department of
International Relations and Cooperation (DIRCO) staff that is sent to
the missions abroad. The Committee noted that the DIRCO staff is
trained on a similar course that is provided to tour operators, which
capacitates them to be tourism ambassadors in their respective
embassies. It was noted that the DIRCO staff is also hosted every
year at Indaba and they are trained on how to identify tour operatorsthey can work with, and programmes they can implement with the
media. Secondly, the staff is introduced to local products at Indaba so
that they can get information that could be used when interacting with
tour operators in their own countries.
The SAT had previously briefed the Committee that it was impossible
to use tourism attachés in missions abroad. However, the Committee
noted that some countries in SADC, such as Mozambique, had
tourism attachés stationed at their embassies. The Committee urges
South African Tourism to explore the possibility of using tourism
attachés to maximise on a partnership already established with
DIRCO.
6.2.3 Maximising interventions of the South African National
Conventions Bureau
South Africa is ranked number one in the African continent with
regard to business tourism. The Committee observed that the rating of
the South African National Conventions Bureau (SANCB) was linked
to the International Congress and Convention Association (ICCA) and
that South Africa hosted an average of 120 business events per
annum.
The Committee is however concerned that the SANCB activities are
mostly concentrated around the three major cities, namely,
Johannesburg, Durban and Cape Town. The Committee notes that the
average size of business events in South Africa was 700 to
800 delegates and that not all cities in the country have the capacity to
host such huge events. The Committee will be conducting close
oversight on the NCB to monitor whether smaller meetings are hosted
in smaller towns or big cities. This will be done to track the
implementation of the commitment made by the NCB that some
events in 2016 will be hosted in Mpumalanga and Grahamstown to
address geographical spread and seasonality.
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6.2.4 Improving airlift
The Committee noted that the Western Cape Province had finalised
their Airlift Strategy and KwaZulu-Natal was also working on theirs.
It is commended that SAT had advised the two provinces on the four
core markets being pursued in the marketing strategy, in assistingthem to align their airlift strategies with activations in these markets.
The Committee also recognises that direct routes to the destination are
important and resuscitating direct flights such as the one that used to
exist between Johannesburg and Mumbai would be important for
increasing arrivals from India. The SAT and the Department are urged
to continuously engage the Department of Transport on the prospects
of developing a national airlift strategy that will assist other provinces
and towns in improving international and domestic tourist arrivals.
South African Tourism is also encouraged to engage airlines to open
more direct routes to South Africa.
6.2.5 Addressing challenges in the grading scheme
The Tourism Act (Act No. 3 of 2014) outlines grading as a voluntary
scheme. The Committee has observed that there are numerous
challenges plaguing the grading scheme and there is a need for a
policy review to investigate amongst other things, a possibility of a
free but compulsory system. The Committee notes that the Tourism
Grading Council of South Africa is currently not fully implementing
grading as outlined in the Act as not all tourism services, facilities and
products are being graded. Grading is only limited to theaccommodation sector and has not been extended to other tourism
touch points such as attractions and transportation. The Committee is
concerned that the Tourism Grading Council of South Africa
(TGCSA) considers the extended mandate of the Tourism Grading
Council in Act as unfunded and therefore comprising quality
assurance for destination South Africa. The TGCSA is urged to
engage the Department on funding constraints with regard to the
extended mandate as prescribed in the Act to include all facilities in
the tourism value chain in the grading scheme.
6.2.6
Improving Indaba as Africa’ prime tourism show
The Committee has over the years raised concerns about the waning
impact of Indaba as South Africa’s number one tourism show. This
was based, among other things, on the format of the show, quality of
buyers, value-for-money for participants and lack of tourism research
aspect/ seminars in the show. The Committee is pleased to note that
the decision to have a partner that will plan and coordinate Indaba on
behalf of South African Tourism has not changed. The SAT is
commended for having started with the tender process which is at
advanced state and that the announcement on the successful bidder to
plan and coordinate Indaba would be made soon.
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6.2.7 Prospects for tourism growth in 2016
The tourism industry has been distressed in South Africa due to a
number of factors, including the visa regime and Ebola epidemic in
West Africa. However, the Committee has observed that the industry
has seen an encouraging recovery as tourist arrivals in January 2016started to increase. The recent statistics released by Stats SA indicate
that there were 1 012 641 tourist arrivals which amounts to 15 percent
growth compared to January 2015. The growth was observed in all
major markets with China growing at 93 percent, Germany improving
by 22 percent, United Kingdom growing at 16 percent and America
by 11 percent. This was a positive start and the indicators were
considered positive for a continued growth in 2016. The Committee
notes that the SAT has a forecast of 2 percent growth in the Annual
Performance Plan for 2016/17 but the growth is optimistically going
to be above 2 percent based on the favourable exchange rate whichpositions South Africa as an affordable and value-for-money
destination for foreign markets. The Committee is confident that the
speedy amendment of the unabridged birth certificates requirement in
the immigration regulations as recommended by the Inter-Ministerial
Committee will also have a huge positive impact to the increase in
tourist arrivals.
6.2.8 The role of private sector in marketing South Africa
The Committee noted that South African Tourism has recently signed
a three-year Memorandum of Understanding with TOMSA Levywhich details how the funds will be utilised. It is noted a 15 percent
collaborative fund has been set aside to be implemented by TOMSA
Levy. However, all the initiatives implemented using TOMSA Levy
are done collaboratively with the Tourism Business Council of South
Africa. The levy is used for two key projects. Firstly, there is a short
term project which deals with marketing and promotion in four major
markets, namely Germany, UK, US, and China. The 15 percent
collaborative fund will also be used for PR and branding. It is also
noted that a global campaign is on the cards for a reputational
campaign. Secondly, a domestic campaign called “The Finder’s
Keepers” has been implemented in partnership with the SundayTimes. The project highlights the nine provinces and their “Hidden
Gems”. The Committee is however concerned that the TOMSA Levy
collectors are declining and that many establishments are not
contributing to the levy. This might necessitate a policy review with
regard to the contributions made by the private sector to the marketing
initiatives. The Committee would therefore be commissioning an
internal benchmarking research to gain insights on how other
countries are dealing with this matter, including possibilities of policy
and legislative review proposals for a compulsory tourism tax.
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6.2.9 Unleashing domestic tourism potential
The Committee welcomes the recommendations of panel review
report of South African Tourism commissioned by the Minister. The
panel identified a gap in the relationship between the nature-based
tourism, SanParks and other provincial agencies in terms ofaffordability and accessibility of these attractions to the citizens. The
Committee notes that the SAT has had discussions with SanParks on
domestic tourism discounts, such as using the wild card. This will
make nature-based tourism, including game reserves, nature reserves,
and botanical gardens affordable to citizens. Another area that has
been neglected is arts and culture and it is noted that the SAT has had
discussion with relevant agencies to map out the cultural, arts and
heritage strategy to leverage on these aspects of domestic tourism.
The Committee had also identified this missed opportunity and hence
initiated and undertook a joint oversight visit with the Portfolio
Committees on Arts and Culture and Environment. This was based on
the fact that arts and culture is very important for domestic tourism,
but is not well developed and marketed.
In the insights provided by the Minister of Tourism, improvement of
cultural tourism is based partly on marketing and partly experience,
and the combination of both makes cultural tourism attractions. The
cultural villages, for example, need attention to provide a memorable
experience. The SAT is currently in the process of finalising domestic
consumer insights. The research has come up with findings that the
inspirational campaign “My First Time Campaign” aimed at
encouraging South Africans to travel was successful. Furthermore,
SAT has partnered with organisers of domestic events such as the
biking event that takes place in Limpopo to increase domestic
tourism. The Minister alluded that they are working with the industry
to ensure that domestic tourism is affordable to South Africans. The
private sector should come to the table to make domestic tourism
accessible and affordable.
The Committee also observed that there are municipal resorts that are
dilapidated and not functioning optimally, and that if these resorts are
renovated they could make domestic tourism affordable. However,there is not enough budget to make significant contribution to
upgrading municipal resorts. The Committee noted that the Minister
also agreed that municipal resorts could be the solution to addressing
the affordability of accommodation, and that there needed to be a
collaboration with the provinces to address this matter.
6.2.10 Improving implementation of Social Responsibility
Implementation (SRI) projects
The Committee has observed over the years that there was a challenge
in implementing the Expanded Public Works Programme or SocialResponsibility Projects (SRI) projects as part of the programmes
undertaken by the Department. It was noted that the Minister also
alluded that implementing community projects in rural areas was
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sometimes difficult and the failure rate was high. The Department had
commissioned forensic audits and some cases were served before the
courts. The Committee commends the interventions of the Department
whereby efforts were being shifted from developing ad hoc
community projects towards destination enhancement, which will
improve tourist experiences in destination South Africa. TheCommittee notes that community projects in the future will be
carefully selected to enhance product mix, and that products such as
cultural villages could also be an option as cultural diversity is part of
South Africa’s uniqueness.
6.2.11 Ease of travel and accreditation of tour operators abroad
In the update provided by the Minister, the Committee noted that
Brazil does not need visas and the Minister of Home Affairs recently
announced that Russian citizens who want to travel to South Africa
for leisure reasons would be exempted from Visa requirements. Thisis a new dispensation and will address the difficulty of travelling from
Russia, which has been a large visa requiring geographical area.
Furthermore, the accreditation of tour operators is no longer a
requirement from visa exempt countries for leisure tourists. In China,
the need for in-person application is no longer a challenge as all tour
operators are accredited. People wanting to travel to South Africa as
leisure tourists can now apply for their Visa through the accredited
tour operators. It is noted that the same applies in India, but the
outstanding issue in India is the capacity of Home Affairs to process
Visa applications. The Committee welcomes the Cabinet
announcement that Home Affairs will be exempting travellers from
the BRICS countries who hold Visas from countries such as US, UK,
Schengen and all other countries who apply stringent visa application
processes. These tourists will be issued a Visa on arrival. The
Committee, however, notes that this was only a policy statement at a
time and not a decision yet, but it is a matter that will be given serious
attention by Cabinet. The one outstanding matter from the IMC
recommendations is the amendment to the Immigration Regulations
that deals with the requirement of the unabridged birth certificates,
especially from visa exempt countries.
7
Conclusion
The Committee recognises that the tourism industry is impacted by a
number of internal and external factors. Most of the external factors are
fluid and the government has no control over them nor do they fall within
the purview of the private sector. The fluidity of the international tourism
trends in the sector compel well-coordinated efforts between the state and
the private sector. The Department of Tourism and South African
Tourism are therefore charged with a demanding task of ensuring that
they develop strategies that leverage on favourable factors and mitigate
the negative effects to destination South Africa. Some of the favourable
factors are exchange controls that have nonetheless not been harnessed to
give mileage to the country as a preferred and value-for-money
destination.
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The Committee commends the Department and South African Tourism
for stretching the appropriated budget for tourism through a number of
partnerships they have forged with both the public and private sector
partners. Tourism thrives in partnerships and the number of partnerships
realised in the current financial year epitomises the kind of collaboration
that is desirable to grow the sector. The proposed partnerships with regardto heritage, arts and culture organisations in particular, will be tracked by
the Committee with keen interest to monitor how the Department unlocks
domestic tourism to address affordability and accessibility by the citizens.
The Committee is satisfied with how the Department and South African
Tourism will be spending the appropriated budget as outlined in the
Annual Performance Plans for the 2016/17 financial year. The Strategic
Plan and Annual Performance Plan tabled by South African Tourism has
introduced numerous improvements on how the Entity will be conducting
its business in the future. This is a welcome improvement as it gives
effect to the mandate of South African Tourism to market the country
domestically and internationally. The quarterly reports will afford the
Committee an opportunity to conduct oversight on regular basis to track
expenditure patterns and see if the new plans take the sector to a growing
trajectory.
8. Recommendations
The Committee observations led to a number of recommendations that
are consolidated in line with the Committee Strategic Plan and Annual
Performance Plan for the 2016/17 financial year. These
recommendations have both short-term and long-term ramifications.
The Committee recommends that:
8.1 The Minister ensures that the Department devises innovative ways to
ensure the implementation of their Human Resources Strategy
within the confines of the compensation of employee’s budget
approved by the National Treasury, without compromising service
delivery and mandate of the Department.
8.2 The Minister ensures that the Department properly plans for
projects, and that partner organizations implementing projects onbehalf the Department adhere to agreed time-frames to avoid delays
in the implementation of projects and achieving targets in the
Annual Performance Plan.
8.3 The Minister ensures that the Department works closely with other
government departments and agencies through intergovernmental
structures and professional fora to unblock hindrances with regard to
providing signage to major tourist attractions throughout the country
and report to the Committee within six months of adoption of this
report on progress made in this regard.
8.4 The Minister persuades colleagues within the Cabinet for a speedy
and holistic implementation of the IMC recommendations to resolve
all outstanding Visa-related issues, including the requirement for
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unabridged birth certificates, and Cabinet announcement on Visa
exemptions for BRICS countries, to ease travel and increase tourist
arrivals to the country and report to the Committee within three
months of adoption of this report on progress made.
8.5
The Minister ensures that the South African Tourism finalises thenegotiations with the National Treasury and other partners on the
final solution to mitigate currency losses and reports to the
Committee within six months of the adoption of this report on
progress made.
8.6 The Minister ensures that the Grading Council of South Africa
conducts a policy review of its mandate as espoused in the Tourism
Act (Act no. 3 of 2014) and presents the policy proposals to the
Committee during the legislative review process.
8.7
The Minister ensures that the National Conventions Bureau
provides a quarterly breakdown of the 138 meetings planned for
2016/17 and specify the expected number of delegates and revenue
to be generated by each meeting; indicate in which provinces, cities,
or towns the meetings will be held, and a plan to deal with
geographic spread and submit this addendum to the Committee when
South African Tourism comes for the first quarter reporting for
2016/17 financial year.
8.8 The Minister considers a policy review on TOMSA Levy collection
and investigates other modalities for private sector funding of
tourism in South Africa.
Report to be considered.
2. REPORT OF THE PORTFOLIO COMMITTEE ON JUSTICE
AND CORRECTIONAL SERVICES ON BUDGET VOTE 18:
CORRECTIONAL SERVICES, DATED 21 APRIL 2016
The Portfolio Committee on Justice and Correctional Services, having
considered the Department of Correctional Services’ 2016/17 budget (Vote
18) and the annual performance plan, reports as follows:
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1. INTRODUCTION
1.1 Section 27 of the Public Finance Management Act (No. 1 of 1999)
makes provisions for a minister to table the annual budget for a
financial year in the National Assembly before the start of thatfinancial year. Section 10(1)(c) of the Money Bills Amendment
Procedures and Related Matters Act (No. 9 of 2009) makes provision
for ministers to table strategic and annual performance plans for their
respective departments, public entities or institutions, which must be
referred to the relevant portfolio committee for consideration and
report.
1.2 The above-mentioned budget and planning documents were tabled in
March 2016. The Committee subsequently received a political
overview of the budget from the Minister of Justice and Correctional
Services (“the Minister”), Adv. Michael Masutha, and a briefing led
by the National Commissioner for Correctional Services (“the
National Commissioner”), Mr Zach Modise, on the 2016/17 APP and
budget allocation.
1.3 The DCS’s mandate is derived from the Correctional Services Act
(No. 111 of 1998), as well as the white papers on Correctional
Services (2005) and Remand Detention Management in South Africa
(2014). The legislation and policies inform all the DCS’s efforts
towards achieving the safe and humane detention of offenders and
remand detainees, and their rehabilitation and reintegration into
communities.
1.4 The DCS’s strategic planning is informed by the above-mentioned
legislative and policy provisions, as well as the government-wide
Medium-Term Strategic Framework (MTSF) 2014-19, which is
geared towards the implementation of the National Development
Plan’s (NDP) Vision 2030.
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2. POLITICAL OVERVIEW BY THE MINISTER OF JUSTICE
AND CORRECTIONAL SERVICES
2.1 According to the Minister’s foreword in the DCS’s 2016/17 AnnualPerformance Plan (APP), the DCS is making steady progress as far as
the transformation of the correctional system from a punitive system
aimed at punishing offenders, to one that provides rehabilitation
programmes to address offending behaviour, and prepare offenders to
be law-abiding citizens once their sentences have expired.
2.2 In his overview of issues affecting the DCS, the Minister highlighted
the review of the parole regime, the need to reduce recidivism,
developments with regard to the DCS’s IT capabilities and proposals
for how the DCS’s challenges with regard to infrastructure
development and minor maintenance work may be addressed.
2.3 The above-mentioned shift in focus has necessitated several reviews
of the DCS’s policies and practices. For instance, several weaknesses
in the correctional supervision and parole regime have been detected.
The National Council for Correctional Services (NCCS) has therefore
reviewed the entire parole regime. They are expected to present their
findings and recommendations to the Ministry in the near future.
2.4 The correctional system has to be especially responsive to the needs
of young offenders who had to be equipped with skills to
reduce/prevent recidivism. Many ex-offenders complain that their
inability to secure employment contributed to their recidivism. A
criminal record prohibited them from seeking employment in certain
sectors. However, there were many other sectors in which ex-
offenders with could seek employment despite having a criminal
record. Employers had to be sensitised to the difficulties ex-offenders
were confronted with owing to the stigma attached to having been
incarcerated. Society at large, too, has to “open up” to offenders.Recidivism would only be reduced through cooperation between
communities, business, civil society and the government.
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2.5 The DCS’s Information and Communications Technology (ICT)
environment remained a cause for concern. The DCS is key roleplayer
to the success of the Integrated Justice System (IJS), which seeks to
create digital synchrony and modernisation of the Criminal JusticeSystem (CJS). This modernisation of ICT infrastructure and systems
was recommended by the Criminal Justice Review Committee, and
forms part of the Seven Point Plan aimed at enhancing the CJS. The
DCS was in the process of procuring an integrated inmate
management system (IIMS) which is a fully automated transversal
system designed to feed into the IJS. The IIMS will, for the first time,
connect the DCS’s approximately 240 correctional centres, thereby
ensuring that inmate information is instantly and seamlessly
accessible to all relevant stakeholders in the value chain.
2.6 On infrastructure, the Minister reminded the Committee that in the
past the DCS had been almost entirely self-sufficient as far as capital
works projects and maintenance were concerned. Given the
constraints the Department of Public Works (DPW) was contending
with, and in light of the continued government-wide austerity
measures, it may be appropriate to consider restoring the DCS’s
capacity to, as far as is practical, deliver its own infrastructural
projects, and be responsible for maintaining existing infrastructure.
3. STRATEGIC GOALS FOR 2016/17
3.1 According to its 2015/16 to 2019/20 strategic plan, the DCS’s mission
is to contribute to a just, peaceful and safer South Africa through the
effective and humane incarceration of inmates, and the rehabilitation
and social reintegration of offenders. The DCS committed to playing
its role to ensure that the MTSF and the NDP’s strategic outcomes are
achieved. The overarching goal is to build a safer South Africa where
all people are and feel safe.
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3.2 To this end the DCS has committed to:
- providing all remand detainees and sentenced offenders with
safe, secure and humane conditions of detention and
incarceration;- ensuring that remand detainees attend court as
prescribed/required, and that they are provided with services
responding to their needs, including personal wellbeing
programmes; and
- attending to sentenced offenders’ health care, rehabilitation
and social reintegration needs.
4. Overview of the DCS’s budget
4.1 The JCPS cluster will receive approximately R166,892 billion in
2016/17. This constitutes 23 per cent of the total national budget.
Table 1 illustrates the allocation across the cluster.
Justice, Crime Prevention and Security
Cluster
2016/17
(R’000)
% of Cluster Vote
Correctional Services 21 577.3 13%
Defence and Military Veterans 47 169.7 28%
Independent Police Investigative Directorate 246.1 0.14%
Justice and Constitutional Development 16 049.7 9.6%
Office of the Chief Justice and Judicial
Administration865.0 0.52%
Police 80 984.9 48.5%
Total for Cluster 166 892.723.1% of national
budgetTotal appropriation by Vote 721 148.2
4.1 As illustrated above, the DCS received approximately R21,577 billion
i.e. 3 per cent of the national budget, and 13 per cent of the JCPS
cluster’s allocation. Expenditure is projected to increase by 6.3 per cent
annually, to approximately R24,7 billion by 2018/19.
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4.2 The DCS’s budget is distributed across the following five
programmes: Administration (Programme 1), Incarceration
(Programme 2), Rehabilitation (Porgramme 3), Care (Programme 4),
and Social Reintegration (Programme 5).
4.3 As in previous years, the bulk of the allocation, about 81 per cent,
goes towards the Administration and Incarceration programmes
which receive 18 per cent and 63 per cent respectively. The
Rehabilitation and Social Reintegration programmes again receive the
lowest allocations, which when combined only amount to 9.6 per cent
of the total DCS budget – 0.8 per cent less than in 2015/16. As in the
previous year, the Care programme will receive 9 per cent of the
budget. This trend will continue over the medium-term, as is
illustrated in Table 2 below.
PROGRAMME 2016/17 2017//18 2018/19 2016/17 to 2018-19
Programme 1: Administration 3 876,2 4 199,5 4 458,2 12 533,9
Programme 2: Incarceration 13 700,9 14 498,4 15 624,2 43 823,5
Programme 3: Rehabilitation 1 217,3 1 439,2 1 541,4 4 197,9
Programme 4: Care 1 975,1 2 010,7 2 122,8 6 108,6
Programme 5: Social Reintegratio 807,8 901,1 954,2 2 663,1
Total Expenditure Estimates 21 577,3 23 048,9 24 700,8 69 327,0
Table 2: Projected spending over the medium-term
5. Overview of allocations per programme
5.1
Programme 1: Administration
5.1.1. The Administration programme provides for the functions that
underpin the DCS’s service delivery, and comprises administrative,
management, financial, information communication and technology,
research, policy co-ordination and good governance support
functions. The sub-programmes in this programme have increased
from seven to eight: Ministry, Judicial Inspectorate for Correctional
Services (new), Management, Human Resources, Finance, Internal
Audit, Information Technology and Office Accommodation.
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5.1.2. This programme receives the second largest allocation – i.e.
R3,9 billion, which amounts to a 4.92 per cent increase on the
previous year’s allocation. The bulk of the allocation will again go
towards the ‘compensation of employees’ (76 per cent) with ‘goodsand services’ and ‘computer services’ receiving 19 per cent and
3 per cent respectively. Table 3 illustrates the budget allocation
across this programm