1. Portfolio Committee on Human Settlements 08 March 2016 Responses to SONA and Budget Speech – 2016 Mr. M. Tshangana

2. NDP Recommendations – Respond systematically to entrenched spatial patterns across all geographic scales that exacerbate social inequality and economic inefficiency; – Review housing policies to better realize constitutional housing rights and ensure that the delivery of housing is used to restructure towns and cities and strengthen the livelihood prospects of households; 2

3. NDP Recommendations – Develop a more coherent and inclusive approach to land i. e. develop overarching principles for spatial development; – Revise the regulations and incentives for housing and land use management; – Radically revise the housing finance regime; – Build capabilities for transforming human settlements; and – Develop bolder measures to develop sustainable human settlements. 3

4. MTSF – Human Settlements Medium Term Strategic Framework (2014-2019): – Ensuring that poor households have adequate housing and better living conditions; – Support the development of a functionally and equitable residential property market; and – Improving institutional capacity and coordination for better spatial targeting. 4

5. Strategic Goal – Human Settlements Strategic goals of the Department: – Accelerate the delivery of housing opportunities; – Improve access to basic services; – Provide a framework for more efficient land use; and – Improve access to the property market. 5

6. Responses to the 2016 SONA Economic Growth – Nine Point Plan; – The Department has initiated the Catalytic Projects Programme to give impetus to socio-economic growth; – Programme will deliver R298bn of multiplier benefits; – Proposal to align the Government Employee Housing Scheme and the Finance Linked Individual Subsidy Programme (FLISP); – Minister Sisulu has now been delegated to chair of the SIP7 Sub-Committee and Department will now activate the necessary mechanisms to coordinate the planning, alignment and funding for integrated human settlements development including transport with municipalities ; 6

7. Responses to the 2016 SONA Economic Growth – Nine Point Plan; – The Department has issued Ministerial directives to ensure 10% of human settlements grant funding is allocated to youth enterprises and professionals undertaking work in the sector. – The Department has issued Ministerial directives to ensure 30% of human settlements grant funding is allocated to women enterprises and professionals undertaking work in the sector. – The Department has concluded an agreement with Department of Small Business Development and work has begun on the development of co-operatives with human settlements and housing development – Vulindlela Project 7

8. Responses to the 2016 SONA Economic Growth – Nine Point Plan; – As part of the response to improve access to social and rental accommodation Department with SHRA and Provinces have initiated and implemented projects in line with the inner-city revitalisation strategies and this inlcudes Umlazi, Joburg, Cape Town and Tshwane Inner-Cities – Department already through the Gauteng Partnership Fund, TUHFT and USDG providing funding for student accommodation. – Department is with the eThekwini Metropolitan undertaking a process to support the development of 6000 units for accommodation 8

9. Responses to the 2016 SONA Economic Growth – Nine Point Plan; – The Department has finalised draft Memoranda of Agreement with Department of Rural Development and Land Reform, Water and Sanitation, Science and Technology, Public Works and Public Enterprises – Objective is for the Department to support cross-cutting initiatives including bulk and link services related to water and sanitation, innovative building technology and even broadband roll-out – through USDG, HSDG, Social Housing Restructuring Grant and Land release initiatives. 9

10. Responses to the 2016 SONA Migration Policy: – Department is part of the team formulating the policy; – Subsidy regime allows for non-South African citizens to benefit from rental subject to non-subsidised rate – Department is part of the IMC team delegated under leadership of Home Affairs to liaise with UNHCR on the matter of migration Funding Leverage: – The rationalization of NURCHA, NHFC and RHLF into a consolidated DFI as presented to the Portfolio on the 01 st March 2016. 10

11. Responses to the 2016 Budget Speech Cost Containment – Department budget curtailed by total of R3.8bn – The Department has included representatives of National Treasury in the assessment and recommendation processes of the Catalytic Projects and the integrated development zone projects referenced by the Minister of Finance form part of the human settlements projects to be implemented. – The travel and subsistence policies of Department are consistent with the National Treasury guidelines 11

12. Responses to the 2016 Budget Speech Cost Containment – Department budget curtailed by total of R3.8bn – Department compensation of employees is receiving attention and the ADG has appointed a Human Resources Improvement Task Team to implement the structure as proposed and approved with Minister and this includes activation of the regional management in the Department – Coherence, support and ownership by management to ensure government objectives and outcomes are achieved. – Directives and measures issued to entities to ensure development mandate of government implemented. 12

13. MTEF Allocation - 2016 The budget of the Department has been affected negatively by the economic downturn. The Departmental capital and operational budget was reduced although additional funding was provided for programme and project support. 13

14. Budget Reductions over 2016 MTEF R1.6 billion reduction to the Human Settlements Development Grant; R807 million reduction of the Urban Settlements Development Grant; The goods and services budget reduced by R16.7 million in 2016/17, R17 million in 2017/18 and R20.5 million in 2018/19; and Compensation of employees reduced by R28.9 million in 2017/18 and R43.1 million in 2018/19. 14

15. Allocation by Programme for the 2016 MTEF Programme 2016/17 R`000 2017/18 R`000 2018/19 R`000 1. Administration 442 274469 920 467 322 2. Human Settlements Policy, Strategy and Planning 83 06388 298 86 951 3. Programme Delivery Support 224 582208 339 199 921 4. Housing Development Finance 29 940 93733 799 769 35 865 833 Total 30 690 85634 566 326 36 620 027

16. Compensation of Employees 2016/172017/182018/19 Costs to company establishment383 491 000416 449 000424 352 000 Allocation after budget cut383 491 000387 519 000381 217 000 Shortfall0-31 930 000-43 135 000 The current staff establishment consists of 893 positions. Of these 646 are funded positions, of which 605 are filled and 41 vacant. The Department will implement measures now as to ensure that the Department will be able to meet the shortfall, within the framework of the approved structure by Minister and a human resources improvement plan.

17. Allocation over MTEF by Economic Classification Total allocation R`000 2016/172017/182018/19 Indicative allocation Departmental Opereational 764 390 782 111769 063 Compensation of employees 383 491 387 519381 216 Goods and services 375 433 388 852381 817 Payment for Capital assets 5 466 5 7406 030 Payments for financial assets --- Grants and transfer payments 29 926 466 33 784 21535 850 964 Grants 29 123 459 32 532 59034 333 980 Human Settlements Development Grant 18 283 991 21 060 34322 281 843 Urban Settlements Development Grant 10 839 468 11 472 24712 052 137 Municipal Human Settlements Capacity Grant--- Entities 792 395 1 240 4851 505 196 Social Housing Regulatory Authority: Operational36 392 38 21240 428 Social Housing Regulatory Authority: Restructuring Capital Grant424 388 768 7151 006 064 Social Housing Regulatory Authority: Institutional Investment Grant40 183 38 49040 722 Housing Development Agency167 512 215 668228 177 Community Schemes Ombuds Services23 920 29 40031 105 National Housing Finance Corporation100 000 105 800 Rural Housing Loan Fund - 50 00052 900 Departmental Transfers10 61211 14011 788 Bursaries Scheme 9 3559 822 10 392 UN Habitat 1 2111 2721 346 Transfer to Households46 50 Total 30 690 856 34 566 32636 620 027

18. Provincial Impact Reduction on the HSDG Provinces 2016/17 2017/18 2018/19 R`000 DORA 2015 Published Allocation Revised Allocation Reduction Total Allocation by province EASTERN CAPE 2 167 1561 991 457-175 699 2 332 862 2 334 906 FREE STATE 1 210 6301 098 411-112 219 1 285 972 1 364 176 GAUTENG 5 473 3365 022 669-450 667 5 769 301 6 161 483 KWAZULU-NATAL 3 414 9573 124 702-290 255 3 632 106 3 857 283 LIMPOPO 1 311 7091 208 370-103 339 1 362 651 1 482 446 MPUMALANGA 1 419 9731 314 645-105 328 1 488 961 1 579 219 NORTHERN CAPE 402 276371 109-31 167 427 374 453 421 NORTH WEST 2 297 2862 151 817-145 469 2 435 403 2 579 011 WESTERN CAPE 2 186 6682 000 811-185 857 2 325 713 2 469 898 Total 19 883 991 18 283 991-1 600 000 21 060 343 22 281 843

19. Municipal Impact of the Reduction on the Urban Settlements Development Grant 2016/17 2017/18 2018/19 Original Allocation Revised Allocation Reduction Original Allocation Revised Allocation Reduction Original Allocation Revised Allocation Reduction ProvincesMetros EASTERN CAPEBuffalo City 748 370 731 499 -16 871 791 090 774 202 -16 888 836 973 813 335 -23 638 Nelson Mandela 888 308 868 282 -20 026 939 015 918 970 -20 045 993 478 965 421 -28 057 Sub Total 1 636 678 1 599 781 -36 897 1 730 105 1 693 172 -36 933 1 830 451 1 778 756 -51 695 FREE STATEMangaung 728 133 725 003 -3 130 769 697 767 326 -2 371 814 339 806 113 -8 226 GAUTENGEkurhuleni 1 933 951 1 890 351 -43 600 2 044 347 2 000 706 -43 641 2 162 919 2 101 836 -61 083 Jo'burg 1 816 766 1 775 809 -40 957 1 920 473 1 879 476 -40 997 2 031 861 1 974 478 -57 383 Tshwane 1 574 837 1 539 334 -35 503 1 664 734 1 629 196 -35 538 1 761 289 1 711 548 -49 741 Sub Total 5 325 554 5 205 494 -120 060 5 629 554 5 509 378 -120 176 5 956 069 5 787 862 -168 207 KWAZULU- NATAL eThekwini 1 929 176 1 885 686 -43 490 2 039 299 1 995 766 -43 533 2 157 578 2 096 646 -60 932 WESTERN CAPECape Town 1 456 336 1 423 504 -32 832 1 539 468 1 506 605 -32 863 1 628 757 1 582 760 -45 997 Grant Total 11 075 877 10 839 468 -236 409 11 708 123 11 472 247 -235 876 12 387 194 12 052 137 -335 057

20. THANK YOU “We have come a long way – Celebrating 20 Years of Freedom!” 20