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Department of Defence 2004/05 Medium Term Expenditure Framework

Department of Defence 2004/05 Medium Term Expenditure Framework. SCOPE. Aim Expenditure History Defence Challenges Policy & Budget Priorities Budget Submission Policy Options Conclusion & Discussion. AIM.

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Department of Defence 2004/05 Medium Term Expenditure Framework

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  1. Department of Defence 2004/05 Medium Term Expenditure Framework

  2. SCOPE • Aim • Expenditure History • Defence Challenges • Policy & Budget Priorities • Budget Submission • Policy Options • Conclusion & Discussion

  3. AIM To present the Department of Defence’s Estimate of Expenditure for the 2004/05 MTEF period to the Joint Standing Committee of Parliament on Defence.

  4. Expenditure History

  5. 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

  6. Defence Policy & Budget Priorities

  7. Defence Support for Government’s 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

  9. Restoration of Defence Capabilities • Renewal of HR Composition • Deployable Combat Readiness Levels • Rebuilding Mobilization Reserves • Disposal of Surplus Stores & Equipment • New Information Technology Systems • M&R of Defence Facilities & Infrastructure

  10. Defence Budget Submission

  11. 2004/05 2005/06 2006/07 R'000 R'000 R'000 20,257,326 22,123,617 22,360,684 DOD MTEF ALLOCATION: 2004/05 TO 2006/07(Nominal Terms)

  12. 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%) Defence Allocation per Main Programme: 2004/2005DoD Budget: R20 257 million

  13. 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%) Allocation per Sub-Programme: Administration R720m

  14. 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.

  15. 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%) Allocation per Sub-Programme: Landward Defence (R3 326m)

  16. 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.

  17. 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%) Allocation per Sub-Programme: Air Defence (R2 222m)

  18. 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.

  19. 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%)

  20. 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).

  21. 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%) Allocation per Sub-Programme: Military Health Support (R1 306 million)

  22. 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.

  23. 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%)

  24. 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.

  25. 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%) Allocation per Sub-Programme: Defence Intelligence (R146 million)

  26. 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.

  27. 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%)

  28. 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%)

  29. 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.

  30. 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%)

  31. 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%)

  32. 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%)

  33. Operating Funds

  34. Defence Policy Options

  35. Program & Policy option 2004/05 (RM) 2005/06 (RM) 2006/07 (RM) DEPT BE DEPT BE DEPT BE 1. Peace Support DRC 315,549 125,000 322,325 129,000 328,825 132,000 Burundi 564,378 373,000 577,044 385,000 599,953 394,000 Medical Consumables 37,950 - 40,040 - 42,040 - Obsolete main medical equipment 43,500 - - - - - Medical mobilisation unit 18,220 - 10,550 - 11,080 - Medical task team 15,000 - 15,830 - 16,620 - Airbase infrastructure 37,500 - - - - - Special Forces brigade 8,190 - 5,130 - - - 300000 300000 300000 Sub-total 1,040,287 498,000 970,919 514,000 998,518 526,000 2. Military skills development 260,400 - 596,500 - 768,800 - 3. Helicopter systems Maritime 03/04 projection 391989* 413733* 438,557 -131,698 -196,784 Maritime 04/05 projection 260,291 216,949 448,402 9,845 Maritime Operate - - - - 15,000 - 200000 200000 200000 Rooivalk 301,000 301,000 313,000 313,000 268,000 268,000 Rooivalk Operate 78,000 - 85,000 - 92,000 - Sub-total 379,000 301,000 398,000 313,000 375,000 277,845 4. Diplomatic initiative Attaché offices 33,890 - 19,910 - 22,290 - Presidential aircraft, operate 11,000 - 23,210 - 24,370 - VVIP hospital ward 10,000 - 3,500 - 3,680 - Sub-total 54,890 - 46,620 - 50,340 - General capacity - - 1,000,000 Total excl SDP 1,734,577 799,999 2,012,039 827,000 2,192,658 1,803,845 SDP 03/04 projection 5,620,744 6,696,685 4,608,293 SDP 04/05 projection 5,342,103 6,045,815 4,018,711 -278,641 -651,870 -589,582 Deficit/savings Options Recommended by the National Treasury 300000

  36. Changes in the DOD’s allocation since the previous presentation

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

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