Department of Rural Development and Land Reform

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Department of Rural Development and Land Reform
Medium Term Budget Policy Statement

• Presentation to the Standing Committee on
  Appropriations

2 November 2009
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FINANCIAL PERFORMANCE The Department has
achieved a record spending of 99.9 (2008/07
99.5) against the adjusted appropriation of R6.6
billion for the past Financial year.
2008/09 R000 2007/08 R000
Budget allocation 6,659,396 5,928,269
Actual Expenditure 6,654,636 5,897,497
Spending as a percentage 99.9 99.5
Unspent funds 4,760 30,772
Unspent funds as a percentage 0.1 0.5
The Restitution and Land and Tenure Reform
Programmes received allocations of R3.1 billion
(2007/08 R3.6 billion) and R2.7 billion
(2007/08 R1.6 billion) respectively representing
89 of the Departmental adjusted appropriation.
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SPENDING PER PROGRAMME(For the past two
financial years)
  2007/08 Financial year 2007/08 Financial year 2007/08 Financial year 2008/09 Financial year 2008/09 Financial year 2008/09 Financial year 2008/09 Financial year
  Final appropriation Spending 31/03/2008 Spent Final appropriation Spending 31/03/2009 Variance Spent
  R000 R000 R000 R000 R000
Programme 1 Administration 426,554 424,994 99,6 453,442 453,316 126 99,9
Programme 2 Surveys Mapping 98,085 97,257 99,1 72,044 71,875 169 99,8
Programme 3 Cadastral Survey Management 137,937 137,616 99,7 116,384 116,306 78 99,9
Programme 4 Restitution 3,638,611 3,638,465 100 3,124,781 3,122,148 2,633 99,9
Programme 5 Land Tenure Reform 1,593,471 1,571,073 98,6 2,800,713 2,799,539 1,174 99,9
Programme 6 Spatial Planning Information 22,018 21,836 99,1 34,834 34,256 578 98,3
Programme 7 Deeds Registration 11,593 6,256 53,9 57,198 57,196 2 100
Total 5,928,269 5,897,497 99,5 6,659,396 6,654,636 4,760 99,9
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2009/10 ADJUSTED ESTIMATES OF NATIONAL
EXPENDITURE (AENE) BUDGET

• The Department originally requested an additional
  R4.4 billion but due to the prevailing economic
  conditions, the Department revised its request to
  R1.7 billion for unforeseeable and unavoidable
  expenditure with regard to, amongst others, the
  new offices of the Minister and Deputy Minister,
  Rural Development, Restitution and Deeds Trading
  Account.
• The Department received an additional allocation
  of R292 million for Rural Development (R252
  million), Minister and Deputy Minister (R9
  million) and General Salary Adjustment (R31
  million).
• R2,340 million transfer of function Integrated
  Sustainable Rural Development Programme (ISRDP)
  from the Department of Co-orperative Governance
  and Traditional affairs.

R000 Main Budget Original Additional Funding Additional Funding Requested Additional Allocations Reprioritisation/shifts/virements Adjusted Budget
Administration Surveys and Mapping Cadastral Survey Management Restitution Land Tenure Reform Spatial Planning Information Auxiliary Associated Services R487,457 R96,147 R111,824 R1,904,284 R3,454,928 R33,562 R12,856 R170,910 R32,000 R3,495,427 R709,992 R24,375 R54,672 R170,910 - R32,000 R1,050,000 R430,246 R24,375 R54,672 R22,101 - R2,000 R6,000 R252,340 R2,000 R7,592 R181,722 - R27,000 R197,151 R-483,847 R31,225 R46,749 R689,280 R96,147 R140,824 R2,107,435 R3,223,421 R66,787 R67,197
TOTAL R6,099,058 R4,487,376 R1,762,203 R292,033 R0 R6,391,091
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ORIGINAL MEDIUM TERM EXPENDITURE FRAMEWORK (MTEF)
REQUEST

• The Department changed its programmatic budget
  structure from 7 to 5 programmes, to reflect the
  new rural development mandate which was approved
  by National Treasury. The changes will be
  effected on the 1 April 2009.
• The Department submitted its original MTEF
  submission to National Treasury on 25 July 2009
  and requested R18.3 billion over the MTEF.
• Rural Development and Restitution together
  requested R16.5 billion or 90 of the
  Departments total request
• Restitution requested R10.3 billion or 56 of the
  Departments total request.

R000 2010/11 2011/12 2012/13 TOTAL
Administration Geo Spatial Cadastral Services Rural Development Restitution Land Tenure Reform R163,393 R266,816 R1,925,757 R3,834,739 R40,166 R182,036 R386,583 R2,088,305 R3,657,642 R32,316 R195,563 R418,020 R2,277,999 R2,838,953 R32,985 R540,992 R1,071,419 R6,292,061 R10,331,334 R105,467
TOTAL R6,230,871 R6,346,882 R5,763,520 R18,341,273
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REVISED MTEF REQUEST
R000 2010/11 2011/12 2012/13 TOTAL
Administration Geospatial and Cadastral Services Rural Development Restitution Land Reform R163,393 R266,816 R500,000 R1,000,000 0 R182,036 R386,583 R525,000 R1,050,000 0 R195,563 R418,020 R551,250 R1,102,500 0 R540,992 R1,071,419 R1,576,250 R3,152,500 0
TOTAL R1,930,209 R2,143,619 R2,267,333 R6,341,161

• National Treasury requested a revised MTEF
  submission due to the prevailing economic
  conditions which the Department submitted on 12
  August 2009
• The Department revised the requested amount to
  R6.3 billion over the MTEF or a 65 reduction
  from the original request.
• Rural Development and Restitution together
  requested R4.6 billion or 73 of the Departments
  total request.
• Restitution requested R3.1 billion or 49 of the
  Departments total request.

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PROPOSED MTEF BUDGET
R000 2010/11 2010/11 2011/12 2011/12 2012/13 2012/13
R000 Indicative Allocation Proposed Budget Indicative Allocation Proposed Budget Indicative Allocation Proposed Budget
Administration Geospatial and Cadastral Services Rural Development Restitution Land Reform R554,617 R251,248 0 R1,584,701 R4,099,636 R718,010 R518,064 R500,000 R2,584,701 R4,099,636 R576,462 R267,026 0 R2,086,448 R4,720,970 R758,498 R653,609 R525,000 R3,136,448 R4,720,970 R606,664 R280,377 0 R2,190,770 R4957,019 R802,227 R698,397 R551,250 R3,293,270 R4,957,019
TOTAL R6,490,202 R8,420,411 R7,650,906 R9,794,525 R8,034,830 R10,302,163

• The proposed budget over the MTEF is in terms of
  the new programmatic budget structure to reflect
  the new Rural Development mandate which was
  approved by National Treasury.
• Currently, the Rural Development Programme does
  not have a baseline over the MTEF.
• The indicative baseline for Restitution over the
  MTEF is less than the 2007/08 level.

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2ND QUARTER SPENDING PER PROGRAMME
Budget R000 Available budget after April to Sept spending R000 Budget Spent from April to Sept Spending June to Sept R000
Administration 507,457 273,812 46 132,767
Surveys and Mapping 96,147 58,242 39 20,591
Cadastral Survey Management 131,824 72,337 45 29,812
Restitution 1,877,284 166,855 91 289,052
Land Tenure Reform 3,434,928 2,009,304 42 606,663
Spatial Planning and Information 38,562 19,117 50 7,993
Auxiliary and Associated Services 12,856 10,812 16 279
TOTAL 6,099,058 2,610,480 57 1,087,158
Linear target end Sept 2009 was 50 and was
exceeded by 7, as opposed to the first
quarters 14 over spending of the linear. 2nd
quarter spending represented a 42 under spending
of the quarters revised drawings, as opposed to
the 7 over spending and deficit cash flow of
R152 million end 1st quarter.
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2ND QUARTER SPENDING PER ECONOMIC CLASSIFICATION
Budget R000 Available budget after April to Sept spending R000 Budget Spent from April to Sept Spending June to Sept R000
Compensation 932,580 584,237 37 177,785
Operational costs 619,075 303,927 51 187,042
Current transfers to households 16,308 11,408 30 1,666
Capital transfers to households 3,510,371 1,119,373 68 602,151
Departmental agencies and accounts 1,020,724 591,534 42 118,514
TOTAL 6,099,058 2,610,480 57 1,087,158
Departmental agencies and accounts include Land
Acquisition (PLAS) funds of R1,018 billion and
the spending indicated was paid from the suspense
account in respect of Land Acquisition.
Linear target end Sept 2009 was 50 and was
exceeded by 7, as apposed to the first quarters
14 over spending of the linear. 2nd quarter
spending represented a 42 under spending of the
quarters revised drawings, as opposed to the 7
over spending and deficit cash flow of R152
million end 1st quarter.
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MAIN COST DRIVERS

• The goal of the Land Redistribution for
  Agricultural Development (LRAD) Sub-programme is
  to contribute more significantly to agricultural
  development and to extend the target group beyond
  the poor so as to also include emerging black
  farmers. LRAD is designed to provide grants to
  black South African citizens to access land
  specifically for agricultural purposes.
• The Pro-active Land Acquisition Strategy (PLAS)
  allows the Department of Rural Development and
  Land Reform (DRDLR) to acquire land in terms of
  the Provision of Land and Assistance Act, 1993
  (Act No 126 of 1993) Section 10(a).
• The Commission on Restitution of Land Rights
  (CRLR) provides restitution of rights in land in
  terms of the Restitution of Land Rights Act, 1994
  (Act No 22 of 1994) section 42D, read with
  section 2, to persons or communities
  dispossessed of such rights after 19 June 1913 as
  a result of past racially discriminatory laws or
  practices. Restitution can take the form of land
  restoration, financial compensation, or a
  combination. In claims for restoration of land
  rights, restoration of the specific land that the
  community was dispossessed of is recommended
  where at all feasible, so as to ensure access to
  land and opportunity by rural communities.
• Comprehensive Rural development seeks to achieve
  vibrant and sustainable rural communities as well
  as the long terms outcome of social cohesion and
  development.

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Thank you!