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

2. 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

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

4. 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.

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

6. BUDGET FRAMEWORK

7. 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
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%

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

9. DIVISION OF REVENUE

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

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

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

13. 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%)

14. 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).

15. 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%)

16. 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.

17. 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%)

18. 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.

19. 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%)

20. 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.

21. 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%)

22. 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.

23. 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%)

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

25. 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%)

26. 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 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.

27. 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 )

28. 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.

29. 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.

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

31. 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

32. 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 .

33. DEPARTMENT OF DEFENCE
QUESTIONS ?????
COMMENTS !!!!!

34. DEPARTMENT OF DEFENCE
Thank You