According to the 2014 budget – an overview of which Finance Minister Pravin Gordhan presented on 26 February – the government has set aside R8.7 billion for the settlement of restitution claims over the next three (3) years. This falls far short of the R180 billion that the Department of Rural Development and Land Reform has estimated to be the cost of re-opening land claims over the next 15 years. It shows that government cannot fund the costs entailed in implementing the Restitution of Land Rights Amendment Bill and that its promises to restore land to thousands of people are false.
The Bill has been much publicised during the run-up to the elections. It will re-open the window for people to make restitution claims (the previous claims period closed in 1998). The Bill was approved by the National Assembly on 25 February and is due to go to the National Council of Provinces for the next stage of the legislative process in the first week of March. If there is insufficient time to complete the legislative process before the elections the Bill will lapse. This seems likely given that the minimum turn around time for Bill in the NCOP is 6 weeks.
Below is an analysis of the budget for land restitution, in light of Minister Gordhan’s budget speech:
Table: Land Reform and Restitution budgets by financial year (in billion Rands)
|Land Reform (redistribution & tenure reform)||3.284||3.394||2.766||2.818|
Sources: National Treasury 2012, 2013a, 2014: Estimates of National Expenditure. National Treasury 2013b: Medium Term Budget Policy Statement.
- The budget for land restitution is lower now than it has been since 2009/10 (in nominal terms) and since 2004/5 (adjusted for inflation).
- Government estimates that 379,000 new claims may be lodged which, if existing claims are any predictor of the scale of these, would likely cost about R180 billion.
- What is the likely future scale of restitution? The existing claims that are not finalized (approximately 30,000) plus the expected new claims of (379,000) make a total of potentially 409,000 claims.
- However, the claims that have already been settled are mostly urban claims which were settled relatively quickly, and paid out with cash compensation far below the market value of the properties. Future claims are likely to be more predominantly rural and claims related to Betterment (forced villagisation in the Bantustans) which are more complex, more expensive and more time-consuming to resolve than those already settled.
- Government aims to resolve all existing and new claims (409,000) in the coming 15 years – in other words, to speed up the rate of settling claims six-fold.
- Assuming that the new claims will be as cheap and easy to settle as past claims (which is doubtful), which is what the government’s estimate of R180 billion assumes, it would require an annual budget for restitution of R12 billion each year over 15 years.
- If land claims continue to be settled at the current rate (i.e. if budgets were to increase at the level of inflation), it would take 121 years to settle the claims.
It is not surprising, then, that the most vocal opposition to the Restitution of Land Rights Amendment Bill has come from among the 30,000 rural communities still waiting for their claims to be settled or finalised. Their demands that their claims be ‘ring fenced’ and protected from future claims have been rejected. Instead the amended version of the Bill provides in Section 6(2)d for the Commission to use its discretion to prioritise certain claims, but does not require it to do so.