Department%20of%20Defence

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Department of Defence 2004/05 Medium Term
Expenditure Framework
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SCOPE

• Aim
• Expenditure History
• Defence Challenges
• Policy Budget Priorities
• Budget Submission
• Policy Options
• Conclusion Discussion

3
AIM
To present the Department of Defences Estimate
of Expenditure for the 2004/05 MTEF period to the
Joint Standing Committee of Parliament on Defence.
4
Expenditure History
Item Financial Year (R'000) Financial Year (R'000) Financial Year (R'000)
Item 2000/01 2001/02 2002/03
Defence Vote 13,909,843 16,052,950 18,844,734
Defence Expenditure 13,900,166 16,044,647 18,835,801
Amount Surrendered 9,677 8,303 8,933
Percentage of Vote 0.07 0.05 0.05
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Defence Challenges

• Affordable Sustainable
• Health Age Profile
• Personnel Retention
• Reserve Forces
• Main Equipment Obsolescence
• Infrastructure Facilities
• NEPAD Support
• Combat Readiness Levels
• Criminality
• Information Systems
• Exchange Inflation Rates

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Defence Policy Budget Priorities
7
Defence Support for Governments Diplomatic
Initiatives in Africa

• African Union Structures
• Common Africa Defence Security Policy
• SADC Security Management
• High Profile NEPAD Programmes
• Sharing Experiences such as Disarmament,
  Demobilization etc
• Donating Excess Equipment
• Sharing Learning Opportunities
• Opening Military Attaché Offices

8
Defence Support to Regional Security

• Potential deployments wrt Post Conflict
  Reconstruction
• Commitment to OP MONUC II, Phase III in the DRC
• Commitment to the establishment of an Africa
  Mission in Burundi
• Emergent commitment for the establishment of an
  African Standby Force

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Restoration of Defence Capabilities

• Renewal of HR Composition
• Deployable Combat Readiness Levels
• Rebuilding Mobilization Reserves
• Disposal of Surplus Stores Equipment
• New Information Technology Systems
• MR of Defence Facilities Infrastructure

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• Defence Budget
• Submission

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DOD MTEF ALLOCATION 2004/05 TO 2006/07
(Nominal Terms)
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Defence Allocation per Main Programme
2004/2005DoD Budget R20 257 million

• Joint Support2 303 million(11,37)
• Military Health Support1 306 million (6,44)
• Maritime Defence 1 093 million (5,39)
• Air Defence 2 222 million (10,97)
• Landward Defence3 326 million(16,42)

• Administration720 million(3,55)
• Special Defence Account8 368 million(39,11)
• Command Control1 019 million(6,02)
• Defence Intelligence146 million(0,72)

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Allocation per Sub-Programme Administration R720m

• Defence Foreign LiaisonR 49,4 million (6,9)
• Political DirectionR 13,5 million (1,9)
• Policy and PlanningR 49,9 million (6,9)
• Departmental DirectionR 5,5 million (0,8)
• HR Support ServicesR 256,9 million (35,7)
• Inspection Services R 37,1 million (5,1)
• Legal Services R 65,5 million (9,1)

• Religious ServicesR 4,2 million (0.6)
• SANDF Command and ControlR 6,3 million (0,9)
• Financial Services R 170,6 million (23,7)
• Acquisition ServicesR 31,0 million(4,3)
• Corporate CommunicationsR 20,3 million(2,8)
• Reserve ComponentR 9,5 million(1,3)

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CHANGES

• Inspection Services increased by 40 per cent
  from 2003/04 to 2004/05 due to the establishment
  of the Anti-Fraud Directorate and extra funding
  allocated for Crime Prevention.

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Allocation per Sub-Programme Landward Defence
(R3 326m)

• Strategic Direction R 180,4 million (5,4)
• Infantry CapabilityR 1 454,6 million(43,7)
• Armour CapabilityR 124,3 million(3,7)
• Artillery CapabilityR102,9 million(3,1)

• Engineering CapabilityR 178,5 million(5,4)
• Air Defence Artilery CapabilityR 82,3
  million(2,5)
• General Training CapabilityR 149,6
  million(4,5)

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CHANGES

• The 8,7 per cent, 10,4 per cent and 14,6 per
  cent increase in the Infantry, Armour and Air
  Defence Artillery capabilities respectively, is
  mainly due to the multi-role force design
  training as to be able to additionally undertake
  force employment duties in support of internal
  operations (support to the SAPS). This is
  necessitated because of the Infantry capability
  that is deployed in Central Africa.
• The 9,8 per cent increase in the Artillery
  capability is mainly due to the commissioning of
  the Artillery Targeting Acquisitioning System
  (GBAT)
• The deployments in the DRC and Burundi also
  causes the Operational Intelligence subprogramme
  to increase by 9,7 per cent.
• The Strategic Direction subprogramme decreases
  by 10,6 per cent due to the distribution of funds
  to other capabilities in order to sustain ongoing
  internal deployments.

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Allocation per Sub-Programme Air Defence (R2
222m)

• Command Post R 34,0 million (1,5)
• Strategic DirectionR 5,8 million (0,3)
• Operational DirectionR 27,6 million (1,2)
• Helicopter CapabilityR 268,2 million (12,1)
• Air Combat and Recce CapabilityR 196,8 million
  (8,9)
• Transport and Maritime CapabilityR 205,1 million
  (9,2)

• Command and Control CapabilityR 144,4 million
  (6,5)
• Base Support CapabilityR 521,6 million (23,5)
• Training CapabilityR 226,6 million (10,2)
• Technical Support ServicesR 489,2 million
  (22,0)
• Ops Support and Int CapabilityR 103,0 million
  (4,6)

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CHANGES

• The decrease of 62,3 per cent in the Operational
  Direction is mainly due to the distribution of
  funds for the incentive scheme to all relevant
  subprogrammes.
• The 57,1 decrease in the Command Post
  subprogramme is attributed to the closing down of
  the forward Air Command Posts (FACP) as well as
  the closing down of the Air Operations Teams
  (AOT). These personnel will be incorporated under
  the Base Support capability, hence the increase
  of 22,8 per cent increase in this subprogramme.
• The increase of 61,7 per cent in the Strategic
  Direction subprogramme is mainly due to the
  relocation of the Defence Research Centre
  contract of Rm 2 from the Air Combat
  subprogramme.

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Allocation per Sub-Programme Maritime Defence
(R1 093 million)

• Maritime Direction CapabilityR 220,9
  million(20,2)
• Maritime Logistic Support CapabilityR 167,9
  million(15,4)
• Base Support CapabilityR 282,6 million(25,9)
• Maritime Training CapabilityR 140,7
  million(12,9)
• Maritime Combat Capability
• R 280,5 million
• (25,7)

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CHANGES

• The immediate focus of the Navy is to allocate
  resources to the operating budget in preparing
  for the acceptance of the 3 Patrol Corvettes.
  This is evident in the 15 per cent increase in
  the Maritime Combat capability subprogramme over
  the medium term.
• The decrease of 17 per cent in the Maritime
  Logistic Support capability subprogramme is
  attributed mainly to the realignment of the
  personnel allocation due to the closing down of
  Fleet Maintenance Unit (Durban) and Naval
  Armament Depot (Durban).
• The Maritime Training capability subprogramme
  increase of 15,8 per cent is mainly attributed to
  the incorporation of the maritime reserve units
  into this capability (Rm 10).

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Allocation per Sub-Programme Military Health
Support (R1 306 million)

• Military Health TrainingR 99,2 million(7.6)
• Strategic DirectionR 90,4 million(6,9)
• Military Health SupportR 43,8 million(3,4)
• Area Mil Health ServicesR 442,5 million(33,9)

• Specialist Health ServicesR 523,03
  million(40,1)
• Product Support CapabilityR 49,3 million(3,8)
• Base Support CapabilityR 57,4 million(4,4)

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CHANGES

• The average increase of 42,8 per cent per year
  over the medium term in the Product Support
  capability is due to the upkeep of medical stock
  and equipment at medical depots, which is mainly
  utilised for deployment purposes.
• The increase of 173,2 per cent in the Base
  Support Capability id due to the establishment of
  the General Support Base Thaba Tshwane North.
  This causes the decrease of 14,4 per cent in the
  Strategic Direction subprogramme, because the
  base was previously provide for in this
  subprogramme.
• The increase in the Military Health Training
  subprogramme of 24,9 per cent is due to the
  renewal drive to train support personnel within
  the SAMHS to be able to provide an acceptable
  level of medical service.

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Allocation per Sub-Programme Defence
Intelligence (R146 million)

• Defence Intelligence Support R 134,2 million
  (92,0)
• Strategic DirectionR 0,2 million(0,11)
• OperationsR 11,5 million(7,89)

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CHANGES

• The decrease of 94,7 per cent (Rm 2,7) in the
  Strategic Direction subprogramme is mainly due to
  the fact that all foreign related visits are
  incorporated under the Special Defence Account.
• The decrease of 41,5 per cent the Operations
  subprogramme is attributed to the fact that
  Defence Intelligence relocated all sensitive
  activities as well as foreign visits to the
  Special Defence Account.
• The increase of 8,8 per cent in the Defence
  Intelligence Support Services subprogramme is
  mainly due to the increased effort by Defence
  Intelligence to upgrade the South African
  Intelligence College (SADIC) and the satellite
  training facility at Fontana as well as the
  upgrade of the highly deteriorated HQ facility.

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Allocation per Sub-Programme Defence
Intelligence (R146 million)

• Strategic DirectionR 4,6 million(0,20)
• Joint Logistic ServicesR 622,1 million(27,06)
• CMI ServiceR 816,4 million(35,44)
• Military PolicingR 213,3 million(9,26)

• Service CorpsR 49,7 million(2,16)
• Acquisition ServicesR 2,5 million(0,11)
• Joint TrainingR 101,1 million(4,33)
• Departmental SupportR 348,7 million (21,42)
• AssistanceR 0,35 million (0,02)

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CHANGES

• The decrease in the Joint Support Management
  subprogramme of 21,4 per cent is mainly due to
  the reallocation of activities to the Joint
  Logistic Services subprogramme.
• The final payment for the relocation of the San
  community from Schmidtsfrift to Platfontein of Rm
  3,6 was done in 2003/04. This is evident in the
  decrease of 91,1 per cent in the Assistance
  subprogramme.

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Allocation per Sub-Programme Command Control
(R1 219 million)

• Peace Missions in AfricaR500,0 million(57,43)
• Operational Command and Control R 108,3 million
  (8,89)
• Special OperationsR 135,4 million(11,11)
• Conventional OperationsR 275,2 million (22,58)

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Allocation per Sub-Programme SDA (R7 924
million)

• Procurement ServicesR 1 835,2 million (23,16)
• Strategic Defence ProcurementR 5 501,9
  million(69,44)
• Intelligence RelatedR 65,4 million(0,83)
• OperatingR 521,1 million (6,58)

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CHANGES

• Procurement Services subprogramme increase by
  24.4 per cent, and this can be attributed to the
  following
• - Additional allocation of Rm 143 for the
  Combat Support Helicopters.
• - Additional allocation of Rm 70 for the
  upgrade of Casspir armoured personnel
  carriers.
• - Additional allocation of Rm 170 for the new
  portable ground to air missiles.
• The increase of 29,2 per cent in the
  Intelligence Related subprogramme is mainly due
  to the fact that Defence Intelligence will
  conduct all foreign related visits and certain
  sensitive activities under the Special Defence
  Account.

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Allocation per Main Item DoD Budget (20 257
million)

• Compensation of EmployeesR 7 770
  million(38,36)
• Payments for Capital Assets (Buildings)R 67
  million(0,33)
• Goods and ServicesR 4 188 million(20,67)
• Transfer PaymentsR 8 233 million(40,64)

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Allocation per Cost Category Including Strategic
Defence Packages DoD Budget (R20 257 million)

• Personnel ExpenditureR 7 770 million(38,36)
• Armament AcquisitionR 2 422 million(16,41)
• Operating ExpenditureR 4 497 million(30,47)
• Capital ExpenditureR 67 million(0,45)

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Allocation per Cost Category Excluding Strategic
Defence Packages DoD Budget (R14 755 million)

• Personnel ExpenditureR 7 770 million(52,66)
• Operating ExpenditureR 4 497 million(30,47)
• Capital ExpenditureR 67 million(0,45)
• Armament AcquisitionR 2 422 million(16,41)

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Operating Funds
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Defence Policy Options
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Options Recommended by the National Treasury
300000
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Changes in the DODs allocation since the
previous presentation
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Conclusion

• Defence requires a stable Medium Term Expenditure
  Allocation to
• Finance its ordered commitments
• Rebuild capacity
• Renew IT systems