Date: 19/05/2003
Source: Ministry of Housing
Title: Mabandla: Housing Dept Budget Vote 2003/2004
BUDGET SPEECH BY THE MINISTER OF HOUSING, BRIGITTE MABANDLA, MP, (VOTE 29 HOUSING), National Assembly, 19 May 2003
Madam Speaker,
Honourable Members,
Comrades,
INTRODUCTION
Nine years ago the world welcomed South Africa to the community of free nations. The dawn of freedom ushered in a new sense of hope for the majority of our people and for Africa as a whole.
We have travelled a long way since those days a decade ago when the old were not yet dead and the new were not yet born. When the forces, which sought to stop our progress to democracy, were still alive and kicking, resorting to murder and violent attempts at destabilisation in an effort to hold on to the past, which we as South Africans had determined could have no future.
Today, we can point to many successes of transformation. We can point to how we as a nation have been forging a new, inclusive identity. We can truly say that hope is alive in South Africa, and that the progress we are making says that that hope is justified.
I am pleased to have been part of a process of transformation in the Ministry, which was my home until a few weeks ago. Pleased to have been part of the process:
* Of correcting how we see our history;
* Of ensuring that we reflect more honestly on our past;
* Of reclaiming our dignity after centuries of colonialism and apartheid;
* Of creating new symbols and awards, which are framed by and express, our democratic values as a nation.
We have had many outstanding beacons guiding us on our path over these past nine years, as we were fortunate to have the brightest beacons to guide us as we fought to bring democracy to South Africa.
It was painful this Saturday to have to say goodbye to a person who was perhaps the brightest of all those beacons lighting our way to a more caring, inclusive, and democratic society.
It was painful to have to say goodbye to our late comrade and father, Walter Sisulu. But it was also a moment to reflect, looking back over the days since Comrade Walter was released from prison, on how far we have come as a nation.
The last time I was called upon to speak in this House, it was in my role as Deputy Minister of Arts, Culture, Science and Technology.
Today it is my duty to present to you the national budget for housing for the current year, as the new Minister of Housing.
Let me take this opportunity to pay tribute to my comrade and the former Minister, Sankie Mthembi-Mahanyele, for her able leadership of the portfolio of housing. The budget I'm presenting today largely reflects the tremendous strides that have been made by government in meeting the housing challenges of the nation.
And perhaps most importantly, we have made enormous strides together assisting our people in gaining access to housing by building, building and building.
Under the leadership of Comrade Sankie over the past nine years we have seen the construction of almost 1,5 million housing units. We also saw the transfer of 400 000 old municipal houses into the ownership of their longstanding tenants. We have therefore seen many, many homeless and tenants become home owners.
That means that this government of the people has ensured the creation of secure homes with tenure, clean water, good sanitation, and electricity for at least eight million South Africans. We have indeed embarked on a great project of renewal, of hope and of building a better future for all South Africans.
This is a very significant achievement, because it says that we have in the past nine years provided assistance with decent formal housing to a very significant number of people indeed. Our current backlog is estimated at 2,3 million households still requiring assistance. The 330 000 further subsidies already approved indicate that there is more housing in the pipeline for at least another 1,3 million people.
That is tremendous achievement by any standards worldwide. I myself have been able to see many examples of what has already been achieved as I have visited a number of provinces during the past two months while familiarising myself with the challenges and achievements of housing in South Africa.
And I can say to the House today that we have reason to be proud of ourselves, and particularly of our departing Minister. One must indeed agree with the President when he said to this House that we have turned a corner as a country and a nation.
Allow me at this point to thank those MECs and provincial departments in Limpopo, Gauteng, the Western Cape, the Eastern Cape, and Mpumalanga who have hosted me, not only for their warm reception and hospitality, but also for the manner in which they have assisted me getting to grips with vital issues of housing. I would like also to thank those provinces I have yet to visit - I am grateful for the dedication with which everybody is already working on those orientation visits.
Madam Speaker,
Today's budget will continue Housing's well-established approach of giving priority to the reduction of poverty and vulnerability and make a meaningful contribution to economic growth, especially to the empowerment of the historically marginalised groups of our society.
We will also continue to respond to the challenges facing beneficiaries with disabilities and those living with and affected by HIV/AIDS.
We will continue to work towards the empowerment of emerging developers and contractors, and help bring as many women contractors and black professionals as possible into the housing sector.
This is one contribution we can make towards transforming the industry into a truly representative sector able to respond to the country's need for sustainable housing production. We aim to extend and strengthen our contribution to the growth and development strategy by accelerating our drive towards the development of SMMEs within this industry.
Housing clearly has the potential to create thousands of jobs and sustainable communities, and we will continue to drive this process. We will do so among others by continuing to concentrate in the following areas:
* Promotion of marginalised women in construction by setting aside at least 10% of the provincial expenditure for housing projects to be handled by women developers or contractors in order to promote participation of women in the housing delivery process;
* Incorporating integrated land development that encourages all national housing programmes to promote development with all the necessary infrastructure in order to develop sustainable communities;
* Emphasis on a people-centred housing development, which focuses on the promotion of the People's Housing Process (PHP), whereby communities are actively participating in the provision of their own housing;
* Rural housing that will effectively deal with the housing backlog outside of the cities, 31% of which involves rural households
* Rental housing, which is currently provided through the institutional housing subsidy instrument and has been identified as a national expenditure priority to provide beneficiaries with an alternative tenure option
* Upgrading of informal settlements, whereby housing projects are approved to target the elimination of specific informal settlements;
* Savings-linked subsidies to encourage people to save towards their housing developments;
* Housing subsidies for the disabled; and
* Emergency housing needs through which provincial housing departments make provision for unforeseen emergency housing needs. We have resolved to set aside 0,5% to 0,75% of provincial annual allocations for this purpose.
EMPHASIS ON QUALITY
Most importantly, this Budget, honourable members, once again recognises that the emphasis of housing delivery in South Africa has moved beyond the issue of numbers to the enhancement of quality of both our houses and the lives of the people we serve.
This is important, because we must recognise that the eradication of poverty is not only complex, but also needs strategies that will enhance social upliftment of the poor beyond the physical structures that we erect.
Indeed, the success of our housing programme will always be measured by the strides we make in pushing back the frontiers of poverty and expanding access to a better life for all. It is within this context that we want to make this a year in which we build and cement a people's contract for a better future, in which all sectors including communities and financial institutions play their respective roles in accelerating the delivery of quality housing for our people.
Houses built with subsidies are currently being enrolled with the National Home Builders Registration Council (NHBRC). This is an institution responsible for ensuring that:
1. The houses built with subsidies are of a suitable design to meet the development requirement of the areas,
2. The application of the minimum technical norms and standards as contained in the National Building Regulations, the NHBRC home building Manual and the Ministerial Norms and Standards,
3. All building practices and technologies comply with the stipulated minimum requirements.
In addition, the NHBRC will apply its five-year warranty cover to all enrolled houses, which will ensure that any structural defects that may occur in these houses, are rectified.
RENTAL/SOCIAL HOUSING
Quality in housing goes hand in glove with the ability to diversify housing options and the right for beneficiaries to select the type of housing that will adequately address their needs. We have already announced our intention to intensify the strategy for the densification of certain residential areas to optimally utilise scarce land and infrastructure and to meet the growing demand for rental housing.
My Department is in the process of developing a comprehensive strategy for medium-density housing in inner city areas. The programme will cater for new developments as well as the refurbishment or conversion of existing buildings.
The programme will also cater for a variety of design models to suit the widest range of affordability levels. The current Institutional Housing Subsidy programme will, in the process, be evaluated to determine its suitability for the future housing development approach. The finalisation of proposals is expected by August this year.
The Medium Density Housing Development Programme is linked to the Government's initiative to establish and run adequate sustainable social housing institutions to create and manage medium density housing development projects.
In short, the policy proposes the establishment of a sector regulating structure and a dedicated funding regime required to finance the establishment and initial running cost of suitably equipped social housing institutions.
The Social Housing Bill is also being drafted to support medium density housing and will be tabled before parliament this year. The Bill provides for a regulatory body, which will be responsible for accrediting social housing institutions and for ensuring the good governance and sustainability of such institutions.
This because there are indeed many low and medium-income earners who do not wish to become tied down to home ownership and its obligations. They would prefer to take up an affordable rental option, which would give them more mobility in the job market. The government is therefore ensuring that this option too becomes available.
At the Presidential Job Summit held in October 1998, the government, private sector and labour resolved that there is a need for a National Presidential Lead Project on Rental Housing at sufficient scale to pilot affordable mass housing delivery and alternative forms of tenure - especially rental housing. The Presidential Pilot Project on Rental Housing was then conceived to provide 50 000 rental units in three phases over multiple financial years.
I am pleased to inform the House that Government has approved the institutional and financial models to be used in the implementation of the programme as the way is paved for the projects.
This agreement has already led to the appointment of the National Housing Finance Corporation as the management agent for the programme. As a result, the NHFC Board has already approved the creation of a specialist unit within the institution to take responsibility for the implementation of the project. An amount of R225 million in Poverty Relief Funding has already been transferred to the NHFC for the purpose of the partial funding of Phases 1 to 3 of the project.
The three projects selected for the first phase of the Presidential Pilot Project on Rental Housing are in various stages of implementation.
Of the three, Johannesburg (notably the Kliptown sub-project) and Witbank (eMalahleni) have already completed their show units. These show units will serve the dual purpose of physically launching the Presidential Pilot Project on Rental Housing and of further enhancing end-user processes such as unit selection based on individual affordability levels.
The first pilot project for Gauteng was launched by the President in Fordsburg last year and it is a true reflection of the public-private partnership that we need in this programme. In Durban the Roosfontein subproject is being prioritised and it is anticipated that the remaining units to be constructed as part of the first phase in KwaZulu-Natal will target inner city infill and refurbishment projects.
The business plans for the second phase of the project is in the process of being assessed and it is anticipated that this phase will commence shortly.
It is important to take note of the fact that the Presidential Pilot Project on Rental Housing supports the shift in focus from numbers to quality. I am happy to mention that these pilot projects are based on the concept of integrated housing development, which includes the provision of community facilities.
These projects will therefore contribute towards the densification of existing urban areas and pave the way for the provision of lower income housing at medium densities. They will also inform rental housing policy development aimed at facilitating housing projects that will provide rental housing at scale managed by viable non-governmental institutions.
HOUSING FOR SPECIAL NEEDS
Further challenges remain, though, in the area of implementation monitoring and improving administrative efficiencies as well as realigning our policy to cater for the specific needs of the disabled and people affected by HIV/AIDS.
During 2002, work continued in relation to issues of gender equity, the needs of the aged, and persons with disabilities and HIV/AIDS.
We have redesigned our housing subsidy scheme to effectively cater for the disabled in order to add the necessary features suitable for people with disabilities.
People with visual impairment and other disabilities will get an additional amount on top of the normal subsidy to make their homes more accessible and comfortable according to their physical needs. I have no doubt that by improving accessibility measures; we will be increasing the mobility and independence of disabled people.
In addition to this undoubtedly major intervention, we are currently exploring mechanisms that will include an additional subsidy to cater for people infected with HIV/AIDS in line with the government's home-based care strategy.
We aim to join hands with the Department of Social Development in assisting with shelter requirements for areas where home-based care might not be available. We will also intensify the upgrading of informal settlements as the Department has observed that higher incidents of infections seem to take place in this kind of settlement.
Our commitment to eradicating the backlog we inherited is unquestionable. In order to respond positively to the ever-changing housing environment, we have decided to continuously review our housing programme.
We initiated a broad consultation process, which included 15 stakeholder workshops countrywide. All housing and development related stakeholders had an opportunity to table matters of concern regarding housing development and these were debated in an effort to formalise possible policy interventions or adjustments.
Each of the consultation initiatives was carefully documented and my Department is using the results as a basis to identify a development and research agenda for our medium term policy. This will lead to a housing summit, which we unfortunately had to delay in connection with the recent changes in the Ministry. The results will also inform provincial housing development plans and, ultimately, it will culminate in the finalisation of the national housing multi-year development plan.
HOUSING FINANCE
In order to ensure a better quality of life for all South Africans, we will continue to monitor the home building industry to ensure compliance with the transformational requirements of the constitution and other relevant legislation.
Despite the efforts we are making to try and provide affordable housing to the poor, we still have to ensure that all the stakeholders effectively play their respective roles.
The reality is that we still have millions of people who are so poor that they cannot acquire their housing without external assistance. It is in this context that we feel access to finance remains the greatest challenge to low-cost housing development.
The government is therefore obliged to create the necessary environment to address this situation and the restructuring of the financial sector is a necessary priority.
As part of this restructuring, we promulgated the Home Loan and Mortgage Disclosure Act in 2000. The Community Reinvestment Bill is sure to be passed into law during the course of this year.
Whereas the Act requires financial institutions to disclose lending information, the Community Reinvestment (Housing) Bill provides for actual targets, which financial institutions will have to meet in complying with their community reinvestment obligations.
The Bill, like the Home Loan and Mortgage Disclosure Act, makes provision for financial institutions to be rated on their performance.
The targets will be set after consultation with relevant stakeholders, including the financial institutions. The process for the establishment of the Office of the Disclosure has been initiated and is expected to be completed in the next few weeks.
As part of broadening access to housing finance, we are currently trying to inculcate a culture of savings to the housing beneficiaries. This campaign has already yielded positive result since Deputy President Jacob Zuma launched the programme in 2001. As part of further enhancing the programme, my Department is at an advanced stage with the development of a Savings Linked Housing Subsidy Scheme that will further assist beneficiaries to save their contributions in a structured and dedicated, and well-managed way. It is envisaged that the scheme will be introduced during the coming month or so.
In line with Government's commitment to improving the quality of subsidised houses, the subsidy grant has been adjusted to ensure that it is aligned with actual building costs and escalations in building costs indicators.
This is also in line with our objective of ensuring that quality houses are delivered through the Housing Subsidy Scheme, which includes the principle that subsidy beneficiaries must contribute towards achieving access to the benefits of the housing subsidy. The objective of this is to ensure subsidy beneficiary participation in the solution of their housing needs, that an environment is established which instils a culture of savings and that the value of the assets provided through the housing subsidy, are realised.
To ensure that the indigent category of beneficiaries, those who cannot participate in the construction of their own houses and/or who don't have the necessary means to pay the required financial contribution are not prejudiced, Government has decided to allocate enhanced subsides to these groups.
This, Honourable Members, is a clear indication that ours is a budget, which assists those who are in need of housing and have some income. But it is more of a budget, which focuses state resources on the poorest of the poor.
To ensure that these minimum technical requirements that now apply to the housing subsidy financed houses will be achievable on a continuous basis, the housing subsidy has been reviewed.
We have decided to adjust the subsidy grant on an annual basis to ensure that the effects of inflation do not erode the subsidy. I am confident that this new dispensation will ensure quality houses, which will be considered by the beneficiaries as real assets that will improve the quality of their lives.
One way it does so is through this housing vote, which will allow us as never before to make resources available to individuals and families as they go about creating permanent homes.
In this context, it gives me great pleasure to announce that we have again managed to raise subsidy levels for those who qualify. These are significant raises, adjusted to ensure that the subsidy is aligned with actual building costs and escalations in building cost indicators. We are able in fact to say that the subsidy will this year mean more spending power in real terms.
This is also a new approach, which will see the subsidy increase annually to counter the effects of inflation.
The new subsidy levels are as follows:
* For recipients earning from zero to R1500, the subsidy will rise by R2800 from R20300 to R23100. This is an increase of 13,8%
* Beneficiaries who earn R1501 - R2500 will get a R1500 increase, moving their subsidies from R12700 to R14200. This is an increase of 11,8%.
* In the income bracket between R 2501 to R 3500, the subsidy rises from R 7000 to R 7800, an increase of 11,4%
* The indigent, who include the aged, disabled and the health stricken, will have their subsidy increased from R22800 to R25580 provided they earn no more than R800 per month
* The consolidation subsidy for earners up to R 1500 rises from R 10900 to R 12521 and for indigents from R 13400 to R 15000. These increases are by 14,8% and 11.9% respectively.
What becomes crystal clear when one looks at these figures is that we are remaining absolutely consistent in our commitment as government to focus on assisting the poorest of the poor. The largest increases, both in percentage and in monetary terms, are once again going to those of our people with the lowest incomes.
Concerns have been raised that this approach could begin to exclude people who should perhaps qualify for a subsidy. This is an important issue and we will be looking into it thoroughly.
My department has already been tasked with investigating lifting the income limit for the highest subsidy amount from R 1500 per month to R 1794,50, which is currently defined as the minimum living level. I will report to Parliament when we have investigated this matter.
CHALLENGES IN HOUSING
Within our concern for transforming the lives of poor people, the subsidy increases I have announced today continue to be based on the principle that subsidy beneficiaries must contribute towards their own housing. We want them to do so either through savings or sweat equity - participating in the construction of their own houses.
Our aim must be to combat dependency and its twin sister disempowerment in favour of self-sufficiency and its twin sister of a real sense of responsibility, not only for individual housing, but also for the country. Self-sufficiency means self worth. And that means for all of us national pride. This is how housing can contribute to real empowerment and sustainable development.
In one of my orientation visits to the provinces, I met a group of women at Phillipi in Cape Town, most of whom are unemployed. Yet they have built very impressive houses on their own, through both savings and their own sweat. These dedicated women can be an example to all of us. Lamafelandawonye are sitting in the public gallery as my guests this afternoon. Welcome to all of you!
Madam Speaker,
Honourable Members,
Part of sustaining change for the better requires that we do not ignore the fact that housing is unfortunately still a scarce resource. It attracts the unscrupulous who seek to gain profit from it illegitimately.
We have heard stories from a number of places across the country of officials demanding bribes of one kind or another in return for speedy processing of housing subsidies. We have heard of councillors selling houses, which were not theirs to sell. We have heard of businesspeople using RDP houses as storerooms.
In full understanding that these people are but a fraction in the challenges we face in the delivery of houses, we have said unequivocally - and I will repeat it here today: we will act decisively against anyone found to be using their public office or to have abused a relationship of trust with a housing authority for unlawful personal gain.
We will not tolerate abuse by officials who demand or accept bribes or other favours. Nor are we going to tolerate people from outside government who enrich themselves at the expense of the poor and homeless.
We are getting rid of the bad apples in the system that tarnishes the efforts and dedication of thousands of committed, hard working officials. We will not rest until all of those who rob the people in this way are behind bars. We continue to work with the National Prosecuting Authority and other state organs to uproot any misdeeds in the industry.
In the same way, we want to emphasise that we will not accept any action that has the potential to destabilise the housing waiting list. We will work closely with Local Authorities and law-enforcement agencies to prevent illegal land occupations and other queue jumping.
BUILDING CLOSER TO AREAS OF ECONOMIC ACTIVITY
Housing will continue to play a major role in the integration and reconciliation of the divided cities and towns we live in. We are determined that we will play this role increasingly.
We continue through a number of provincial governments and metro councils to deliver medium density housing in various cities.
We do so because we are saying that it is time that what belongs together must come together. That our nation will grow together as our cities and towns grow together.
A number of good examples of this approach can be seen in cities around the country. In Germiston and Johannesburg in Gauteng, in East London and Port Elizabeth in the Eastern Cape, in Durban in KwaZulu-Natal and Witbank and Middleburg in Mpumalanga.
This strategy of building on vacant land and refurbishing existing buildings is bringing new life to these towns and cities, new spending power, and an increased sense of community to areas once said to be blighted. For the new residents, it has brought good housing, shorter trips to and from work, and a positive perspective for the future.
These examples of innovative approaches to social housing are proving very useful as we at national level, in cooperation with the provinces, develop a comprehensive strategy for medium density housing in inner city areas.
Yet despite the obvious advantages of this approach to overcoming the housing divisions of the past, and despite their signal successes in helping regenerate our urban areas, the existing residents of some areas oppose these types of developments.
It is in this context that we particularly support and welcome the tax incentives announced by the Minister of Finance in his budget speech to facilitate inner city redevelopment. They will further enhance our efforts to provide decent housing for less well off people in inner city areas.
Gauteng, for example, has said that the medium-density housing planned for sites such as those in Blairgowrie, Ferndale, and Olivedale, among others, is primarily intended for people with incomes between R3500 and R7000 a month already working or living in the area. But the opponents would prefer to have them out of sight and out of mind - living in township-type settlements, which perpetuate the division of our towns and cities by being far away.
Why this kind of development should give rise to the kind of criticism we have been hearing from Randburg is beyond us. We are talking here about people with income levels, which can ensure that the housing they rent or buy, is sustainable, and that communities become more settled. This must be desirable for everyone, as it is part of our moves countrywide to stabilise and make communities more sustainable.
International Co-operation
We continue to foster bilateral and multilateral relationships for the benefit of housing in South Africa. In partnership with other African countries and countries of the south, we will continue to engage on issues of substance relating to improved human settlements. Accordingly, we will participate in UN Habitat forums and pursue our commitments made at the WSSD regarding the elimination over time of informal settlements, and the provision of clean water.
In conclusion, Madam Speaker, Honourable Members,
Let me say that the subsidy increases I have been able to announce today should be aimed at improving the quality and size of housing products. They are not intended to increase the profit margins of developers and line the pockets of consultants and other professionals involved in the housing development process.
In order to get the most out of the subsidies, further research on certain policy aspects of housing will be prioritised. In particular, we will seek to get a better understanding of the needs of our people so that appropriate products can be designed to meet their requirements.
We further reiterate our commitment to prioritising the poorest and providing a basket of optional housing solutions to meet their needs.
The pace of delivery will continue to reflect a nation hard at work, working together with our communities in the spirit of lLetsema, Vukuzenzele to ensure a nation adequately housed.
I thank you.
Issued by Ministry of Housing
19 May 2003
Source: Ministry of Housing
Title: Mabandla: Housing Dept Budget Vote 2003/2004
BUDGET SPEECH BY THE MINISTER OF HOUSING, BRIGITTE MABANDLA, MP, (VOTE 29 HOUSING), National Assembly, 19 May 2003
Madam Speaker,
Honourable Members,
Comrades,
INTRODUCTION
Nine years ago the world welcomed South Africa to the community of free nations. The dawn of freedom ushered in a new sense of hope for the majority of our people and for Africa as a whole.
We have travelled a long way since those days a decade ago when the old were not yet dead and the new were not yet born. When the forces, which sought to stop our progress to democracy, were still alive and kicking, resorting to murder and violent attempts at destabilisation in an effort to hold on to the past, which we as South Africans had determined could have no future.
Today, we can point to many successes of transformation. We can point to how we as a nation have been forging a new, inclusive identity. We can truly say that hope is alive in South Africa, and that the progress we are making says that that hope is justified.
I am pleased to have been part of a process of transformation in the Ministry, which was my home until a few weeks ago. Pleased to have been part of the process:
* Of correcting how we see our history;
* Of ensuring that we reflect more honestly on our past;
* Of reclaiming our dignity after centuries of colonialism and apartheid;
* Of creating new symbols and awards, which are framed by and express, our democratic values as a nation.
We have had many outstanding beacons guiding us on our path over these past nine years, as we were fortunate to have the brightest beacons to guide us as we fought to bring democracy to South Africa.
It was painful this Saturday to have to say goodbye to a person who was perhaps the brightest of all those beacons lighting our way to a more caring, inclusive, and democratic society.
It was painful to have to say goodbye to our late comrade and father, Walter Sisulu. But it was also a moment to reflect, looking back over the days since Comrade Walter was released from prison, on how far we have come as a nation.
The last time I was called upon to speak in this House, it was in my role as Deputy Minister of Arts, Culture, Science and Technology.
Today it is my duty to present to you the national budget for housing for the current year, as the new Minister of Housing.
Let me take this opportunity to pay tribute to my comrade and the former Minister, Sankie Mthembi-Mahanyele, for her able leadership of the portfolio of housing. The budget I'm presenting today largely reflects the tremendous strides that have been made by government in meeting the housing challenges of the nation.
And perhaps most importantly, we have made enormous strides together assisting our people in gaining access to housing by building, building and building.
Under the leadership of Comrade Sankie over the past nine years we have seen the construction of almost 1,5 million housing units. We also saw the transfer of 400 000 old municipal houses into the ownership of their longstanding tenants. We have therefore seen many, many homeless and tenants become home owners.
That means that this government of the people has ensured the creation of secure homes with tenure, clean water, good sanitation, and electricity for at least eight million South Africans. We have indeed embarked on a great project of renewal, of hope and of building a better future for all South Africans.
This is a very significant achievement, because it says that we have in the past nine years provided assistance with decent formal housing to a very significant number of people indeed. Our current backlog is estimated at 2,3 million households still requiring assistance. The 330 000 further subsidies already approved indicate that there is more housing in the pipeline for at least another 1,3 million people.
That is tremendous achievement by any standards worldwide. I myself have been able to see many examples of what has already been achieved as I have visited a number of provinces during the past two months while familiarising myself with the challenges and achievements of housing in South Africa.
And I can say to the House today that we have reason to be proud of ourselves, and particularly of our departing Minister. One must indeed agree with the President when he said to this House that we have turned a corner as a country and a nation.
Allow me at this point to thank those MECs and provincial departments in Limpopo, Gauteng, the Western Cape, the Eastern Cape, and Mpumalanga who have hosted me, not only for their warm reception and hospitality, but also for the manner in which they have assisted me getting to grips with vital issues of housing. I would like also to thank those provinces I have yet to visit - I am grateful for the dedication with which everybody is already working on those orientation visits.
Madam Speaker,
Today's budget will continue Housing's well-established approach of giving priority to the reduction of poverty and vulnerability and make a meaningful contribution to economic growth, especially to the empowerment of the historically marginalised groups of our society.
We will also continue to respond to the challenges facing beneficiaries with disabilities and those living with and affected by HIV/AIDS.
We will continue to work towards the empowerment of emerging developers and contractors, and help bring as many women contractors and black professionals as possible into the housing sector.
This is one contribution we can make towards transforming the industry into a truly representative sector able to respond to the country's need for sustainable housing production. We aim to extend and strengthen our contribution to the growth and development strategy by accelerating our drive towards the development of SMMEs within this industry.
Housing clearly has the potential to create thousands of jobs and sustainable communities, and we will continue to drive this process. We will do so among others by continuing to concentrate in the following areas:
* Promotion of marginalised women in construction by setting aside at least 10% of the provincial expenditure for housing projects to be handled by women developers or contractors in order to promote participation of women in the housing delivery process;
* Incorporating integrated land development that encourages all national housing programmes to promote development with all the necessary infrastructure in order to develop sustainable communities;
* Emphasis on a people-centred housing development, which focuses on the promotion of the People's Housing Process (PHP), whereby communities are actively participating in the provision of their own housing;
* Rural housing that will effectively deal with the housing backlog outside of the cities, 31% of which involves rural households
* Rental housing, which is currently provided through the institutional housing subsidy instrument and has been identified as a national expenditure priority to provide beneficiaries with an alternative tenure option
* Upgrading of informal settlements, whereby housing projects are approved to target the elimination of specific informal settlements;
* Savings-linked subsidies to encourage people to save towards their housing developments;
* Housing subsidies for the disabled; and
* Emergency housing needs through which provincial housing departments make provision for unforeseen emergency housing needs. We have resolved to set aside 0,5% to 0,75% of provincial annual allocations for this purpose.
EMPHASIS ON QUALITY
Most importantly, this Budget, honourable members, once again recognises that the emphasis of housing delivery in South Africa has moved beyond the issue of numbers to the enhancement of quality of both our houses and the lives of the people we serve.
This is important, because we must recognise that the eradication of poverty is not only complex, but also needs strategies that will enhance social upliftment of the poor beyond the physical structures that we erect.
Indeed, the success of our housing programme will always be measured by the strides we make in pushing back the frontiers of poverty and expanding access to a better life for all. It is within this context that we want to make this a year in which we build and cement a people's contract for a better future, in which all sectors including communities and financial institutions play their respective roles in accelerating the delivery of quality housing for our people.
Houses built with subsidies are currently being enrolled with the National Home Builders Registration Council (NHBRC). This is an institution responsible for ensuring that:
1. The houses built with subsidies are of a suitable design to meet the development requirement of the areas,
2. The application of the minimum technical norms and standards as contained in the National Building Regulations, the NHBRC home building Manual and the Ministerial Norms and Standards,
3. All building practices and technologies comply with the stipulated minimum requirements.
In addition, the NHBRC will apply its five-year warranty cover to all enrolled houses, which will ensure that any structural defects that may occur in these houses, are rectified.
RENTAL/SOCIAL HOUSING
Quality in housing goes hand in glove with the ability to diversify housing options and the right for beneficiaries to select the type of housing that will adequately address their needs. We have already announced our intention to intensify the strategy for the densification of certain residential areas to optimally utilise scarce land and infrastructure and to meet the growing demand for rental housing.
My Department is in the process of developing a comprehensive strategy for medium-density housing in inner city areas. The programme will cater for new developments as well as the refurbishment or conversion of existing buildings.
The programme will also cater for a variety of design models to suit the widest range of affordability levels. The current Institutional Housing Subsidy programme will, in the process, be evaluated to determine its suitability for the future housing development approach. The finalisation of proposals is expected by August this year.
The Medium Density Housing Development Programme is linked to the Government's initiative to establish and run adequate sustainable social housing institutions to create and manage medium density housing development projects.
In short, the policy proposes the establishment of a sector regulating structure and a dedicated funding regime required to finance the establishment and initial running cost of suitably equipped social housing institutions.
The Social Housing Bill is also being drafted to support medium density housing and will be tabled before parliament this year. The Bill provides for a regulatory body, which will be responsible for accrediting social housing institutions and for ensuring the good governance and sustainability of such institutions.
This because there are indeed many low and medium-income earners who do not wish to become tied down to home ownership and its obligations. They would prefer to take up an affordable rental option, which would give them more mobility in the job market. The government is therefore ensuring that this option too becomes available.
At the Presidential Job Summit held in October 1998, the government, private sector and labour resolved that there is a need for a National Presidential Lead Project on Rental Housing at sufficient scale to pilot affordable mass housing delivery and alternative forms of tenure - especially rental housing. The Presidential Pilot Project on Rental Housing was then conceived to provide 50 000 rental units in three phases over multiple financial years.
I am pleased to inform the House that Government has approved the institutional and financial models to be used in the implementation of the programme as the way is paved for the projects.
This agreement has already led to the appointment of the National Housing Finance Corporation as the management agent for the programme. As a result, the NHFC Board has already approved the creation of a specialist unit within the institution to take responsibility for the implementation of the project. An amount of R225 million in Poverty Relief Funding has already been transferred to the NHFC for the purpose of the partial funding of Phases 1 to 3 of the project.
The three projects selected for the first phase of the Presidential Pilot Project on Rental Housing are in various stages of implementation.
Of the three, Johannesburg (notably the Kliptown sub-project) and Witbank (eMalahleni) have already completed their show units. These show units will serve the dual purpose of physically launching the Presidential Pilot Project on Rental Housing and of further enhancing end-user processes such as unit selection based on individual affordability levels.
The first pilot project for Gauteng was launched by the President in Fordsburg last year and it is a true reflection of the public-private partnership that we need in this programme. In Durban the Roosfontein subproject is being prioritised and it is anticipated that the remaining units to be constructed as part of the first phase in KwaZulu-Natal will target inner city infill and refurbishment projects.
The business plans for the second phase of the project is in the process of being assessed and it is anticipated that this phase will commence shortly.
It is important to take note of the fact that the Presidential Pilot Project on Rental Housing supports the shift in focus from numbers to quality. I am happy to mention that these pilot projects are based on the concept of integrated housing development, which includes the provision of community facilities.
These projects will therefore contribute towards the densification of existing urban areas and pave the way for the provision of lower income housing at medium densities. They will also inform rental housing policy development aimed at facilitating housing projects that will provide rental housing at scale managed by viable non-governmental institutions.
HOUSING FOR SPECIAL NEEDS
Further challenges remain, though, in the area of implementation monitoring and improving administrative efficiencies as well as realigning our policy to cater for the specific needs of the disabled and people affected by HIV/AIDS.
During 2002, work continued in relation to issues of gender equity, the needs of the aged, and persons with disabilities and HIV/AIDS.
We have redesigned our housing subsidy scheme to effectively cater for the disabled in order to add the necessary features suitable for people with disabilities.
People with visual impairment and other disabilities will get an additional amount on top of the normal subsidy to make their homes more accessible and comfortable according to their physical needs. I have no doubt that by improving accessibility measures; we will be increasing the mobility and independence of disabled people.
In addition to this undoubtedly major intervention, we are currently exploring mechanisms that will include an additional subsidy to cater for people infected with HIV/AIDS in line with the government's home-based care strategy.
We aim to join hands with the Department of Social Development in assisting with shelter requirements for areas where home-based care might not be available. We will also intensify the upgrading of informal settlements as the Department has observed that higher incidents of infections seem to take place in this kind of settlement.
Our commitment to eradicating the backlog we inherited is unquestionable. In order to respond positively to the ever-changing housing environment, we have decided to continuously review our housing programme.
We initiated a broad consultation process, which included 15 stakeholder workshops countrywide. All housing and development related stakeholders had an opportunity to table matters of concern regarding housing development and these were debated in an effort to formalise possible policy interventions or adjustments.
Each of the consultation initiatives was carefully documented and my Department is using the results as a basis to identify a development and research agenda for our medium term policy. This will lead to a housing summit, which we unfortunately had to delay in connection with the recent changes in the Ministry. The results will also inform provincial housing development plans and, ultimately, it will culminate in the finalisation of the national housing multi-year development plan.
HOUSING FINANCE
In order to ensure a better quality of life for all South Africans, we will continue to monitor the home building industry to ensure compliance with the transformational requirements of the constitution and other relevant legislation.
Despite the efforts we are making to try and provide affordable housing to the poor, we still have to ensure that all the stakeholders effectively play their respective roles.
The reality is that we still have millions of people who are so poor that they cannot acquire their housing without external assistance. It is in this context that we feel access to finance remains the greatest challenge to low-cost housing development.
The government is therefore obliged to create the necessary environment to address this situation and the restructuring of the financial sector is a necessary priority.
As part of this restructuring, we promulgated the Home Loan and Mortgage Disclosure Act in 2000. The Community Reinvestment Bill is sure to be passed into law during the course of this year.
Whereas the Act requires financial institutions to disclose lending information, the Community Reinvestment (Housing) Bill provides for actual targets, which financial institutions will have to meet in complying with their community reinvestment obligations.
The Bill, like the Home Loan and Mortgage Disclosure Act, makes provision for financial institutions to be rated on their performance.
The targets will be set after consultation with relevant stakeholders, including the financial institutions. The process for the establishment of the Office of the Disclosure has been initiated and is expected to be completed in the next few weeks.
As part of broadening access to housing finance, we are currently trying to inculcate a culture of savings to the housing beneficiaries. This campaign has already yielded positive result since Deputy President Jacob Zuma launched the programme in 2001. As part of further enhancing the programme, my Department is at an advanced stage with the development of a Savings Linked Housing Subsidy Scheme that will further assist beneficiaries to save their contributions in a structured and dedicated, and well-managed way. It is envisaged that the scheme will be introduced during the coming month or so.
In line with Government's commitment to improving the quality of subsidised houses, the subsidy grant has been adjusted to ensure that it is aligned with actual building costs and escalations in building costs indicators.
This is also in line with our objective of ensuring that quality houses are delivered through the Housing Subsidy Scheme, which includes the principle that subsidy beneficiaries must contribute towards achieving access to the benefits of the housing subsidy. The objective of this is to ensure subsidy beneficiary participation in the solution of their housing needs, that an environment is established which instils a culture of savings and that the value of the assets provided through the housing subsidy, are realised.
To ensure that the indigent category of beneficiaries, those who cannot participate in the construction of their own houses and/or who don't have the necessary means to pay the required financial contribution are not prejudiced, Government has decided to allocate enhanced subsides to these groups.
This, Honourable Members, is a clear indication that ours is a budget, which assists those who are in need of housing and have some income. But it is more of a budget, which focuses state resources on the poorest of the poor.
To ensure that these minimum technical requirements that now apply to the housing subsidy financed houses will be achievable on a continuous basis, the housing subsidy has been reviewed.
We have decided to adjust the subsidy grant on an annual basis to ensure that the effects of inflation do not erode the subsidy. I am confident that this new dispensation will ensure quality houses, which will be considered by the beneficiaries as real assets that will improve the quality of their lives.
One way it does so is through this housing vote, which will allow us as never before to make resources available to individuals and families as they go about creating permanent homes.
In this context, it gives me great pleasure to announce that we have again managed to raise subsidy levels for those who qualify. These are significant raises, adjusted to ensure that the subsidy is aligned with actual building costs and escalations in building cost indicators. We are able in fact to say that the subsidy will this year mean more spending power in real terms.
This is also a new approach, which will see the subsidy increase annually to counter the effects of inflation.
The new subsidy levels are as follows:
* For recipients earning from zero to R1500, the subsidy will rise by R2800 from R20300 to R23100. This is an increase of 13,8%
* Beneficiaries who earn R1501 - R2500 will get a R1500 increase, moving their subsidies from R12700 to R14200. This is an increase of 11,8%.
* In the income bracket between R 2501 to R 3500, the subsidy rises from R 7000 to R 7800, an increase of 11,4%
* The indigent, who include the aged, disabled and the health stricken, will have their subsidy increased from R22800 to R25580 provided they earn no more than R800 per month
* The consolidation subsidy for earners up to R 1500 rises from R 10900 to R 12521 and for indigents from R 13400 to R 15000. These increases are by 14,8% and 11.9% respectively.
What becomes crystal clear when one looks at these figures is that we are remaining absolutely consistent in our commitment as government to focus on assisting the poorest of the poor. The largest increases, both in percentage and in monetary terms, are once again going to those of our people with the lowest incomes.
Concerns have been raised that this approach could begin to exclude people who should perhaps qualify for a subsidy. This is an important issue and we will be looking into it thoroughly.
My department has already been tasked with investigating lifting the income limit for the highest subsidy amount from R 1500 per month to R 1794,50, which is currently defined as the minimum living level. I will report to Parliament when we have investigated this matter.
CHALLENGES IN HOUSING
Within our concern for transforming the lives of poor people, the subsidy increases I have announced today continue to be based on the principle that subsidy beneficiaries must contribute towards their own housing. We want them to do so either through savings or sweat equity - participating in the construction of their own houses.
Our aim must be to combat dependency and its twin sister disempowerment in favour of self-sufficiency and its twin sister of a real sense of responsibility, not only for individual housing, but also for the country. Self-sufficiency means self worth. And that means for all of us national pride. This is how housing can contribute to real empowerment and sustainable development.
In one of my orientation visits to the provinces, I met a group of women at Phillipi in Cape Town, most of whom are unemployed. Yet they have built very impressive houses on their own, through both savings and their own sweat. These dedicated women can be an example to all of us. Lamafelandawonye are sitting in the public gallery as my guests this afternoon. Welcome to all of you!
Madam Speaker,
Honourable Members,
Part of sustaining change for the better requires that we do not ignore the fact that housing is unfortunately still a scarce resource. It attracts the unscrupulous who seek to gain profit from it illegitimately.
We have heard stories from a number of places across the country of officials demanding bribes of one kind or another in return for speedy processing of housing subsidies. We have heard of councillors selling houses, which were not theirs to sell. We have heard of businesspeople using RDP houses as storerooms.
In full understanding that these people are but a fraction in the challenges we face in the delivery of houses, we have said unequivocally - and I will repeat it here today: we will act decisively against anyone found to be using their public office or to have abused a relationship of trust with a housing authority for unlawful personal gain.
We will not tolerate abuse by officials who demand or accept bribes or other favours. Nor are we going to tolerate people from outside government who enrich themselves at the expense of the poor and homeless.
We are getting rid of the bad apples in the system that tarnishes the efforts and dedication of thousands of committed, hard working officials. We will not rest until all of those who rob the people in this way are behind bars. We continue to work with the National Prosecuting Authority and other state organs to uproot any misdeeds in the industry.
In the same way, we want to emphasise that we will not accept any action that has the potential to destabilise the housing waiting list. We will work closely with Local Authorities and law-enforcement agencies to prevent illegal land occupations and other queue jumping.
BUILDING CLOSER TO AREAS OF ECONOMIC ACTIVITY
Housing will continue to play a major role in the integration and reconciliation of the divided cities and towns we live in. We are determined that we will play this role increasingly.
We continue through a number of provincial governments and metro councils to deliver medium density housing in various cities.
We do so because we are saying that it is time that what belongs together must come together. That our nation will grow together as our cities and towns grow together.
A number of good examples of this approach can be seen in cities around the country. In Germiston and Johannesburg in Gauteng, in East London and Port Elizabeth in the Eastern Cape, in Durban in KwaZulu-Natal and Witbank and Middleburg in Mpumalanga.
This strategy of building on vacant land and refurbishing existing buildings is bringing new life to these towns and cities, new spending power, and an increased sense of community to areas once said to be blighted. For the new residents, it has brought good housing, shorter trips to and from work, and a positive perspective for the future.
These examples of innovative approaches to social housing are proving very useful as we at national level, in cooperation with the provinces, develop a comprehensive strategy for medium density housing in inner city areas.
Yet despite the obvious advantages of this approach to overcoming the housing divisions of the past, and despite their signal successes in helping regenerate our urban areas, the existing residents of some areas oppose these types of developments.
It is in this context that we particularly support and welcome the tax incentives announced by the Minister of Finance in his budget speech to facilitate inner city redevelopment. They will further enhance our efforts to provide decent housing for less well off people in inner city areas.
Gauteng, for example, has said that the medium-density housing planned for sites such as those in Blairgowrie, Ferndale, and Olivedale, among others, is primarily intended for people with incomes between R3500 and R7000 a month already working or living in the area. But the opponents would prefer to have them out of sight and out of mind - living in township-type settlements, which perpetuate the division of our towns and cities by being far away.
Why this kind of development should give rise to the kind of criticism we have been hearing from Randburg is beyond us. We are talking here about people with income levels, which can ensure that the housing they rent or buy, is sustainable, and that communities become more settled. This must be desirable for everyone, as it is part of our moves countrywide to stabilise and make communities more sustainable.
International Co-operation
We continue to foster bilateral and multilateral relationships for the benefit of housing in South Africa. In partnership with other African countries and countries of the south, we will continue to engage on issues of substance relating to improved human settlements. Accordingly, we will participate in UN Habitat forums and pursue our commitments made at the WSSD regarding the elimination over time of informal settlements, and the provision of clean water.
In conclusion, Madam Speaker, Honourable Members,
Let me say that the subsidy increases I have been able to announce today should be aimed at improving the quality and size of housing products. They are not intended to increase the profit margins of developers and line the pockets of consultants and other professionals involved in the housing development process.
In order to get the most out of the subsidies, further research on certain policy aspects of housing will be prioritised. In particular, we will seek to get a better understanding of the needs of our people so that appropriate products can be designed to meet their requirements.
We further reiterate our commitment to prioritising the poorest and providing a basket of optional housing solutions to meet their needs.
The pace of delivery will continue to reflect a nation hard at work, working together with our communities in the spirit of lLetsema, Vukuzenzele to ensure a nation adequately housed.
I thank you.
Issued by Ministry of Housing
19 May 2003
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