Presentation to Standing Committee on Appropriations 28 June

Presentation to Standing Committee on Appropriations: 28 June 2011

Purpose v. To discuss the budget of the Department with specific reference to challenges relating to restitution budget. v. The presentation will focus on: ØHistorical financial performance of Restitution Grants ØCurrent MTEF allocation ØAnd proposal on the way forward. 2

Background v. The Department had anticipated that restitution claims would have been settled by 2008 and as a result National Treasury adjusted the budget in anticipation of the closure of the Commission. v. However, due to complexity of rural claims, internal and external challenges, this target could not be met. v. The Department presented the revised policy priorities during the 2009 MTEF where additional funding of R 5. 4 billion was requested. v. Out of the requested R 5. 4 billion, no additional funding was received except inflation adjusted increases. v. The following slides reflect the historical budget of restitution and land reform grants per financial year. 3

Historical Financial Performance: Land Reform and Restitution (grants) Restitution Grants 2004/05 R'000 ENE 775, 236 2, 488, 998 3, 134, 947 2, 996, 764 2, 891, 635 1, 488, 595 1, 172, 767 1, 016, 721 1, 582, 334 2, 092, 515 3, 333, 531 2, 783, 665 1, 967, 596 2, 969, 853 (241, 485) 1, 042, 432 Actual spending Savings / (deficit) Land Reform Grants 2004/05 R'000 2005/06 R'000 906, 664 2005/06 R'000 2006/07 R'000 2007/08 R'000 (336, 767) 2007/08 R'000 2008/09 R'000 2009/10 R'000 2010/11 R'000 107, 970 (479, 001) (1, 797, 086) 2008/09 R'000 2009/10 R'000 2010/11 R'000 ENE 308, 02 8 563, 77 665, 357 3 1, 009, 548 1, 763, 640 2, 021, 775 2, 521, 459 Actual spending 327, 00 6 491, 16 363, 659 2 483, 086 1, 035, 134 1, 153, 270 505, 469 Savings / (deficit) (18, 978) 72, 611 301, 698 526, 462 728, 506 868, 505 2, 015, 990 4

Historical Financial Performance: Land Reform and Restitution (PLAS) Land Reform PLAS 2004/05 R'000 2005/06 R'000 2006/07 R'000 ENE - - - Actual spending / transfer - - 308, 464 Savings / (deficit) - - (308, 464) 2007/08 R'000 2008/09 R'000 337, 053 852, 673 1, 018, 116 1, 148, 480 821, 750 1, 460, 903 1, 041, 116 1, 028, 480 (484, 697) 608, 230) 2009/10 R'000 (23, 000) 2010/11 R'000 120, 000 According to targets set in the 2008/2009 strategic plan , the programme of land reform needed to redistribute 1. 5 million hectares of white-owned agricultural land, of which a bid of an additional amount of R 3, 8 billion was requested which was then partly funded from the restitution savings. At the same time there was a shift in focus from redistribution through grants to a Pro-active Land Acquisition approach(PLAS). This resulted in savings under grants, which was then utilised to fund the PLAS programme. 5

Current Allocation Restitution Grants Baseline R’ 000 Additional requests Not Approved National Treasury reprioritisation R’ 000 2011/12 1, 660, 728 1, 800, 000 422, 395 2012/13 1, 743, 764 1, 200, 000 448, 161 2013/14 1, 839, 915 750, 000 472, 376 2011/12 2012/13 2013/14 R'000 2, 083, 123 2, 191, 925 2, 312, 291 The Department has during 2010 MTEF presented bids to re-prioritise R 391, 495, 000 to newly created programmes within the department , restitution grants and additional funding of R 3. 75 billion on restitution over the MTEF. The reprioritisation was not approved as requested, but allocated to the restitution programme for grants over the MTEF as indicated above. The effect of the non approval of the additional funding is that the Department does not have adequate funding to honour the commitment of R 5. 4 billion. This commitment referred to excludes Land gazetted, authorised offers not yet accepted by Land owners. The acceptance by land owners may result in increase in commitments. 6

Way Forward v. Given government and policy priorities of the Department tabled to parliament, continued reprioritisation from Land Reform will not assist the Department resolve the Land Restitution budget deficit. v. National Treasury must consider new bids that the department will be presenting during the MTEF. v. Within the current budget allocation, the Department will continue to: Ø Prioritise state land settlements Ø reduce commitments focusing on court orders and financial compensation. 7

Thank you