Statement on the Cabinet meeting of 22 February 2012

23 Feb 2012

Cabinet held its ordinary meeting in Cape Town on 22 February 201.

1. CURRENT AFFAIRS

1.1 Cabinet congratulated the Minister of Finance, Minister Pravin Gordhan, and his team for a progressive and carefully crafted Budget and noted some of the salient features of the Budget, including the following:

• The fiscal framework continues to be countercyclical and support growth and investment.
• The 2012 Budget is about growth, job creation, infrastructure investment, education and better service delivery
• The economy requires effective levers of economic change to accelerate development

- expanding construction of economic and social infrastructure,
- enhancing economic competitiveness
- moderating remuneration and consumption,
- sustaining investment in people and skills,
- supporting rural development and
- job creation are among the levers of economic change at our disposal.
- building the culture of savings

• Infrastructure - leveraging public-sector capital investment as a foundation for long term growth, employment and development
• Over the medium term, the deficit will be reduced and public debt stabilised as a percentage of GDP
• Total government spending in the next year will reach R1.06 trillion
• Continue to strengthen financial management and rooting out corruption in both the private and public sector
• Maintaining the value of social expenditure while shifting emphasis towards capital investment
• Promoting a more competitive economy

1.2 Constitutional Court

Cabinet reinforced both the President Zuma's message and Minister Radebe's statement by welcoming debate and discourse which is characteristic of our constitutional democracy.

The Department of Justice and Constitutional Development will further clarify the point that this is an assessment of the impact of the judgments of the Constitutional Court on the transformation of society. It is also an evaluation of the impact of our jurisprudence on the democratisation process.

Cabinet advises that this should not be misconstrued as an attempt to undermine the independence of the judiciary and the rule of law as entrenched in our Constitution.

2 KEY STRATEGIC DECISIONS INCLUDED THE FOLLOWING:

2.1 Audit Outcomes and the tabling of Annual Reports and Financial Statements of National and Provincial Institutions for 2010/11 Financial Year

Cabinet noted the significant compliance by national and provincial institutions with regard to the timeous tabling of their 2010/2011 annual reports.Steps are being taken by the National Treasury to further assist departments to improve their audit outcomes.

Cabinet endorsed that Accounting Officers and Accounting Authorities submit to their relevant executive authorities corrective steps that would be taken to address concerns raised in their audit reports and that performance agreements of Accounting Officers and Accounting Authorities be updated with steps to be taken to address audit concerns.

Cabinet further approved that departments implement mechanisms to track the receipt and payment of invoices and to submit information to the National Treasury on a monthly basis on the payment and non-payment of invoices within 30 days of receipt.

2.2 Implementation of the Gauteng Freeway Improvement Project

Cabinet approved tolling on the Gauteng Freeway Improvement Project, with effect from April 30 2012. Cabinet further approved the reduction of the tariff for vehicles with e-tags as follows:

This revision of the toll fees has been made possible by a once-off contribution via the fiscus to the South African National Roads Agency (SANRAL) of R5.8 billion. This contribution by government will ensure that the cost for motorcycles and light vehicles is capped at R550 per month.

Time of the day savings of 20% for heavy vehicles to deal with concerns of freight industry.This allows for lower toll fees for off peak times to reduce congestion during peak hours and reduce the economic impact of the toll fees for consumers.

Commuter public transport (taxis and buses) are exempted from the e-toll. The principle of user/payer was reaffirmed.

2.3 Report back on the work of the Presidential Infrastructure Coordinating Commission (PICC)

Further to the endorsement of the Presidential Infrastructure Coordinating Commission (PICC) Infrastructure Plan by the Cabinet Lekgotla, Cabinet noted progress made by the Commission in drawing up the Implementation Plan.

The Infrastructure Plan has five geographically-defined Strategic Integrated Projects (SIPs):

• To develop and integrate rail, road and water infrastructure, centred around two main areas in Limpopo
• Improve the movement of goods and economic integration through a Durban-Free State-Gauteng logistics and industrial corridor.
• Develop major new south eastern node that will improve the industrial and agricultural development and export capacity of the Eastern Cape region and expand the province's economic and logistics linkages with the Northern Cape and KwaZulu-Natal.
• In the North West, expand the roll-out of water, roads, rail and electricity infrastructure.Ten priority roads will be upgraded.
• In the west coast of the country - improve infrastructure to unlock its potential. The plans include expansion of the iron ore rail line between Sishen in the Western Cape and Saldanha Bay in the Western Cape, which will create large numbers of jobs in both provinces.

2.4 Proposed design to the obverse side of circulation coins by rotating the official South African Languages for the period 2012 to 2021

Cabinet approved the proposed design change to the obverse side of circulation coins that will allow for the rotation of the official South African languages for the period 2012 to 2021. In this regard Cabinet approved the signing of the relevant Government Gazette Notice to serve as approval of this design change.

2.5 Development of the South African Strategy for the Palaeosciences

Cabinet noted the South African Strategy for the Palaeosciences. Palaeosciences is the study of the Earth's geological past with a view to understanding how human beings, animals and plants have evolved.

The strategy is intended to provide a holistic framework for the development of the Palaeosciences.The key strategic areas of development are centred around the need to build human capital, provide resources and create an enabling legislative environment, to collect, curate and research the country's palaeosciences treasures and to engage the public in all spheres of the field.The strategy will also provide a platform for awareness that will create pride in all South Africans and enable people to appreciate the special place South Africa occupies in the story of life and humanity on Earth.

2.6 Mid-Term Review of the priorities of government

Cabinet approved the Mid-Term Review Report of the priorities of government produced by Performance Monitoring and Evaluation. The report gives an account of the performance of government since the beginning of the administration. It also provides a problem statement, a summary of the 2009 commitments and a summary of progress to date against the commitments made. The report further identifies key challenges and make recommendations on focus areas for the remainder of the term. The Minister for Performance Monitoring and Evaluation will release the report at a comprehensive media briefing at a date to be announced.

3 BILL APPROVED

3.1 Financial Services Laws General Amendment Bill, 2012

Cabinet approved the submission of the Financial Services Laws General Amendment Bill, 2012 to Parliament.

By way of background: the Financial Services Laws General Amendment Bill, 2012 effects urgent and necessary legislative changes highlighted by the 2008 financial crisis, as outlined in the National Treasury's policy paper "A safer financial sector to serve South Africa better".

The Bill updates 10 financial sector Acts, including the Financial Services Board Act, the Inspection of Financial Institutions Act, the Short-term and Long-term Insurance Acts, the Pension Funds Act and the FAIS Act.

The primary objective of the Bill is to ensure a sound and well-regulated financialservices industry and to promote financial market stability by:

• strengthening the financial sector regulatory framework;
• enhancing the supervisory powers of the regulators; and
• enhancing the powers of the Minister of Finance to address potential risks to the financial system.

The Bill addresses several of the following areas:

• gaps identified by the IMF/World Bank Financial Sector Assessment Program in adherence to international standards for financial regulation;
• the need to align financial sector legislation with the Companies Act (Act No 71) of 2008;
• regulatory overlaps caused by the Consumer Protection Act, 2008 (Act No. 68 of 2008) by ensuring overrides where financial sector legislation has higher consumer protection standards;
• to extend the approach of the Banks Act, 1990 (Act No.94 of 1990)with respect to mergers in the financial sector, and
• ensuring that the Minister of Finance has adequate emergency powers to deal with systemic risks to the financial system.

4 APPOINTMENTS

Cabinet approved the following appointments:

4.1 Mr Thamizhanban Pillay was appointed Deputy Director-General: Health Regulation and Compliance Management at the National Department of Health.

4.2 Ms Valerie Manamane Rennie was appointed Head: Corporate Services (Deputy Director-General) at the National Department of Health.

4.3 South African National Parks (SANParks) Board: The following were appointed members of the South African National Parks (SANParks) Board for a period of three years with effect from 1 April 2012: Mr Kuseni Dlamini (Chairperson), Prof Graham Ian Holme Kerley, Ms Bongi Kunene, Dr Zoe Lees, Dr G Dry, Mr Sithole Mbanga, Prof Gerald Edwin Swan, Ms Noxolo Stella Mteto, Ms Lize McCourt and Dr David Mabunda.

4.4 Cabinet noted the extension of the term of office of the following persons on the South African Statistics Council (SASC) until 30 June 2013: Mr Howard Gerald Gabriels (Chairperson), Professor Haroon Bhorat, Dr Nico Crowther, Prof Tertius de Wet, Professor Maseka Lesaoana, Mr Christo Luus, Mr Gavin Miller, Mr Ben Mphahlele, Mr Abrahams Mutedi, Prof Tyrone Pretorius, Ms Gcanga Qwelane, Mr Pieter Weideman, Dr Khangelani Zuma, Mr Ian Assam, Mr Faldie Esau, Ms Glory Khumalo, Prof Thandwa Mthembu and Dr Kopano Taole

4.5 International Trade and Administration Commission (ITAC): Cabinet confirmed the re-appointment of Mr Riaan de Lange, Mr Ronny Mkhwanazi and Mr Matome Morokolo as part time commissioners of ITAC, and Ms Brenda Mabaso as full-time Deputy Chief Commissioner of ITAC for seven months (until 30 September 2012).

5. ANNOUNCEMENTS

5.1 Cabinet expresses its heartfelt condolences to the family, friends and comrades of the former Premier of the Free State, stalwart Isabella Winkie Direko (27 November 1929 - 17 February 2012). Winkie Direko was an inspiration to all South Africans and her legacy will be sustained by the numerous leaders whom she mentored from a young age. Her contribution as member of Parliament and Premier of the Free State will always be remembered.

5.2 Cabinet expresses its well wishes to Northern Cape Premier Hazel Jenkins, who is currently recovering from illness. We wish Ms Jenkins a speedy recovery.

Statement issued by Jimmy Manyi, Cabinet Spokesperson, Government Communications (GCIS), February 23 2012

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