BRIEFING TO THE PORTFOLIO COMMITTEE ON DEFENCE DEFENCE’S 2003/04 BUDGET FRAMEWORK

DELEGATION Mr J.B. Masilela – Sec Def Mr J.L. Gründling – CFO V Adm H.J.M. Trainor – CCS Mr B.E. Ramfolo – C Acq R Adm R.A.S. Hauter – CDSP Maj Gen F.W. Robbertze – CD J Sup M Mr J.H. April – CDBM Mr A. Visser – CDSM Brig Gen A.L. de Wit – D HR Plan Mr B.J. Engelbrecht – D Bud Mr M.B. Khanyile – D Plan & Prog

DEPARTMENT OF DEFENCE 2003/04 BUDGET PRESENTATION Mr J.H. April Chief Director Budget Management Mr B.J. Engelbrecht - Director Budgeting

INTRODUCTION State of the Nation address – normal participation in the economy. Min of Fin 2003 budget extends and strengthens government’s growth and development strategy. Quality of service delivery, accountability, spirit of Batho Pele. Defence’s mandate and objectives supports key issues addressed by Min of Fin.

SCOPE Budget Framework. Division of Revenue. Medium Term Expenditure Proposals. Supporting key issues addressed by Min of Fin. Questions / comments.

BUDGET FRAMEWORK

DOD BUDGET SINCE 1994/95 9/14/2018 Year 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 Personnel Number 81 288 100 763 97 990 97 087 96 291 90 334 84 923 79 295 76 520 74 599 72 131 69 967 Personnel Budget 4,007 3,561 4,293 4,796 5,516 5,318 5,839 6,182 6,341 7,093 7,252 7,557 Percentage of Budget 37% 34% 42% 50% 57% 51% 39% 35% Operating Budget 4,499 4,412 4,811 3,658 3,396 3,610 3,666 4,253 4,686 4,710 4,913 5,281 Percentage of Budget 41% 42% 47% 38% 35% 26% 25% 23% 24% SDA Budget 2,401 2,562 1,142 1,125 809 1,477 4,405 5,618 7,387 8,247 8,325 9,694 Percentage of Budget 22% 24% 11% 12% 8% 14% 32% 35% 40% 41% 43% Total Budget ` 10,907 10,535 10,246 9,579 9,721 10,405 13,910 16,053 18,414 20,050 20,489 22,532 Percentage of GDP 2,5% 2,2% 1,9% 1,6% 1,5% 1,7% 1.6% 1.5%

MTEF ALLOCATION: 2003/04 TO 2005/06 DEPARTMENT OF DEFENCE (Nominal Terms)

DIVISION OF REVENUE

DEPARTMENT OF DEFENCE ALLOCATION PER MAIN PROGRAMME (Nominal Terms : R’000)

DEPARTMENT OF DEFENCE ALLOCATION PER MAIN ITEM (Nominal Terms : R’000)

MEDIUM TERM EXPENDITURE PROPOSALS Mr B.J. Engelbrecht – D Bud

Allocation per Sub-Programme Defence Foreign Relations R 48,3 million (7,3%) Political Direction R 12,9 million (1,9%) Departmental Direction R 5,5 million (0,8%) Policy and Planning R 51,1 million (7,7%) Financial Management Services R 154,8 million (23,4%) HR Support Services R 232,6 million (35,2%) Legal Services R 61,2 million (9,3%) Acquisition Services R 28,4 million (4,3%) Administration 660 million SANDF Command and Control R 6,1 million (0,9%) Corporate Communications R 19,8 million (3,0%) Religious Services R 4,0 million (0.6%) Reserve Force Management R 9,1 million (1,4%) Inspection Services R 26,3 million (4,0%)

SIGNIFICANT CHANGES Administration (12,8% growth) Rm1 to MoD (HR – HoC, etc). Rm3,071 to CPP (Servicing of MOU, Military Bargaining Council and Military Arbitration Board). Rm3,2 to CPP (World Veterans Congress – 2003 only) Rm2,246 to CPP (Staffing of critical posts). Rm1,992 to CD Res for HR. Rm7,149 to DFR (Function shift from CDI). Rm1,149 to CD EO (Regional staffing). Rm4,381 to C HRSC (Legacy payment from SA Army). Rm8,186 to C Acq (Function transfer from CAF and C Navy – Procurement centers). Rm4,859 to IG (Directorate Anti Fraud).

Allocation per Sub-Programme Infantry Capability R 1 334,2 million (41,8%) Strategic Direction R 201,7 million (6,3%) Armour Capability R 1 12,2 million (3,5%) Air Defence Artillery Capability R 71,5 million (2,2%) Artillery Capability R93,4 million (2,9%) Landward Defence 3 188 million Engineering Capability R 169,7 million (5,3%) Support Capability R 970,5 million (30,4%) General Training Capability R 143,3 million (4,5%) Command and Control R 37,2 million (1,2%) Operational Intelligence R 54,4 million (1,7%)

SIGNIFICANT CHANGES Landward Defence (4,4% decline) Rm2,092 from C Acq (Proj KLOOSTER – test Art wpn & ammo). Rm50 (03/04), Rm100 (04/05) & Rm120 (05/06) for MSDS. Rm30 (03/04), Rm32 (04/05) & Rm36 (05/06) to strengthen conventional Reserve Forces. M&R funds (Rm344) for military specific equipment allocated to SDA to comply with legislation.

Air Defence 2 138 million Operational Direction Strategic Direction R 3,6 million (0,2%) Operational Direction R 73,2 million (3,4%) Command Post R 71,9 million (3,4%) Helicopter Capability R 250,3 million (11,7%) Technical Support Services R 455,7 million (21,3%) Air Defence 2 138 million Air Combat and Recce Capability R 230,8 million (10,8%) Training Capability R 197,8 million (9,3%) Command and Control Capability R 147,6 million (6,9%) Ops Support and Int Capability R 94,2 million (4,4%) Transport and Maritime Capability R 188,9 million (8,8%) Base Support Capability R 423,7 million (19,8%)

SIGNIFICANT CHANGES Air Defence (4,8% growth) Implementation of incentive scheme for Air traffic controllers. Highly skilled technicians to maintain existing and new aircraft – reduce outsourcing.

Allocation per Sub-Programme Maritime Direction Capability R 342,4 million (32,6%) Allocation per Sub-Programme Maritime Combat Capability R 95,1 million (9,1%) Maritime Logistic Support Capability R 198,1 million (18,9%) Maritime Defence 1 051 million Maritime Reserve Capability R 12,2 million (1,2%) Base Support Capability R 266,8 million (25,4%) Maritime Training Capability R 135,9 million (12,9%)

SIGNIFICANT CHANGES Maritime Defence – 7,5% growth Increased spending due to: Attending foreign courses prior to delivery of new vessels. Increased foreign visits for quality assurance, weapons acceptance, EW analysis systems. Upgrading of infrastructure and equipment for acceptance of new vessels. Outfitting of first corvette.

Allocation per Sub-Programme Strategic Direction R 105,4 million (8,4%) Military Health Training R 79,2 million (6.3%) Military Health Support R 55,5 million (4,4%) Military Health 1 254 million Support Base Support Capability R 20,9 million (1,7%) Area Mil Health Services R 438,9 million (35,0%) Product Support Capability R 32,3 million (2,6%) Specialist Health Services R 521,6 million (41,6%)

SIGNIFICANT CHANGES Military Health Support – 8,2% growth Replacement of clinical wings scheduled for 05/06. Establishment of Thaba Tswane GSB during 03/04. Medical inflation stands currently on 23% depleting discretionary funds – currently 3% of total allocation. 9,3% increase in personnel expenditure to fund services of additional health practitioners.

Allocation per Sub-Programme 9/14/2018 Strategic Direction R 2,5 million (1,7%) Defence Intelligence Support R 131,2 million (85,5%) Collection Services R 11,3 million (7,4%) Defence Intelligence 153 million Defence Counter Intelligence Service R 6,3 million (4,1) Intelligence Processing R 1,9 million (1,3%)

SIGNIFICANT CHANGES Defence Intelligence – 7,4% growth Increased involvement in peacekeeping operations. Replacement of equipment.

Allocation per Sub-Programme Strategic Direction R 5,8 million (0,3%) Joint Logistic Services R 557,4 million (27,3%) CMI Service R 804,3 million (39,4%) B-MATT R 11,8 million (0,6%) Joint Support 2 039 million Military Policing R 204,6 million (10,0%) Service Corps R 47,4 million (2,3%) Departmental Support R 292,5 million (14,4%) Joint Training R 112,6 million (5,5%) Acquisition Services R 2,3 million (0,2%)

SIGNIFICANT CHANGES Joint Support – 3,9% growth Major increase in CMI due to SITA tariff increase (Rm19,8). Rm0,777 increased payment to DIDTETA. BMATT services end 31 March 2003. Funds required for termination cost and funding of planned British Peace Support Team. Senior Command and Staff course now responsibility of Joint Trg and establishment of War College (Rm4,688). Final payment of Rm3,6 to SAN community. High increase in cost of rations and telecom spares impact on increased spending on inventories.

Allocation per Sub-Programme Peace Support Missions DRC (MONUC II ): R 55,4 million DRC (MONUC III): R 28,7 million Burundi: R 162,1 million (34,1%) Operational Command and Control R 107,1 million (14,8%) Command & Control 722 million Conventional Operations R 247,0 million (34,1%) Special Operations R 121,5 million (16,8 )

SIGNIFICANT CHANGES Command and Control – 13,3% growth Training of Mil Obs – Rm0,987. Foreign language training – Rm2,617. Evaluation of armament acquisition projects – Rm0,850 – PFMA compliance. Force Employment funds transferred from SA Army – Rm135,6 (03/04), Rm162,8 (04/05) and Rm149,2 (05/06). M&R operational basis and tactical airfields – function transfer from J Sup. Rm12,3 (03/04) and Rm13 (04/05 and onwards). Rm95 (03/04), Rm100 (04/05) and Rm105 (05/06) increased support to SAPS.

SIGNIFICANT CHANGES Special Defence Account – 13,3% growth M&R funds for military specific equipment allocated to SDA to comply with legislation – Rm344. Procurement of 4 x Maritime helicopters – Rm312,5 (03/04), Rm392 (04/05) and Rm413,7 (05/06). SDP decrease: 03/04 from Rb6,533 to Rb6,120. 04/05 from Rb5,933 to Rb5,621. 05/06 from Rb7,197 to Rb6,698.

Allocation per Main Item Personnel Expenditure R 7 093 million (35,4%) Miscellaneous Payments R 11 million (0,1%) Administrative Expenditure R 576 million (2.9%) DoD Budget 20 050 million Transfer Payments R 9 075 million (45,3%) Inventories R 959 million (4,8%) Professional and Special Services R 1 915 million (9,6%) Equipment R 408 million (2,0%) Land and Buildings R 12 million (0,1%)

VS PERSONNEL EXPENDITURE 9/14/2018 PERSONNEL NUMBERS VS PERSONNEL EXPENDITURE RM 7,800 RM 7,300 RM 6,800 RM 6,300 RM 5,800 RM 5,300 RM 4,800 RM 4,300 RM 3,800

Supporting Key Issues Health care - outsourcing in rural areas. Land restitution: final payment to SAN community. Involvement with project VUSELELA. Skills development: MSDS. DIDTETA. Language courses. Technical training – Trg institutes and Service Corps. Military Academy. Foreign representation: Increased number of Military Attaches in Africa. Increased number of foreign students. Participation in AU structures .

DEPARTMENT OF DEFENCE QUESTIONS ????? COMMENTS !!!!!

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