South African War Vets Pay-off could cost R65 billion

CAPE TOWN — The long-awaited estimate of the costs of the ambitious package of benefits proposed for military veterans in legislation before Parliament is between R20bn and R65bn, making it unaffordable for the government — particularly if more veterans come to light.\r\n

These figures are contained in a document that has not yet been tabled before the portfolio committee on defence and military veterans, but which has been circulated to its members.

The initial costing by Alexander Forbes, circulated to all the MPs on the portfolio committee this week, says that if all 56000 registered military veterans qualify for all of the benefits, then the cost will be R65bn.

If these are reduced, perhaps through the application of a means test, then the costs could come down to R19,6bn.

Military veterans director-general Tshepe Motumi said late yesterday that the estimates were "nowhere near" those contained in the Alexander Forbes report.

He said he would be reporting to Parliament’s defence committee on the revised figures on Wednesday .

The Military Veterans Bill ran into trouble at the outset when it landed in Parliament before its financial implications to the state had been costed. Both the rules of Parliament and the Public Finance Management Act state that proposed legislation must be accompanied by its financial implications for the state.

Umkhonto weSizwe military veterans played a significant role in President Jacob Zuma ’s election as leader of the African National Congress (ANC) in Polokwane in 2007.

When Mr Zuma became president of the country, he created a separate department to cater specifically for military veterans.

When Mr Motumi presented the bill to Parliament’s defence committee, opposition MPs insisted that they could not legislate in a vacuum and told him to go and "do your homework".

They expressed doubts that the state could afford the extensive list of benefits that the bill proposes for veterans . The proposed benefits include: pension, housing subsidies, healthcare from military hospitals, compensation for injuries, counselling, public transport subsidies, education and training, employment placement and business opportunities.

Those applying for benefits would be subject to a means test. An appeal board would also be set up, with members appointed by the defence minister.

ANC MPs, however, are clearly under pressure to get the measures on to the statute book regardless of the cost.

They said last month that military veterans were in dire straits and that the costing of the bill should not be allowed to delay its progress. Clearly this increasingly fractious constituency within the ANC will play a key role in the election of the next ANC leader next year.

One of the problems facing the Department of Military Veterans is that there has already been a surge in people claiming to be veterans of the struggle against apartheid. There have also been cases of people defrauding veterans by claiming that they could get access to the benefits for a handling fee of R80.

The initial costing of the financial implications of the bill assumes that the figure of 56000 veterans would remain constant and points out that there is no accurate information on the number of spouses and dependent children involved.

"With those that did integrate or (get) demobilised, it is easy because they entered the system and they either got employed or got a demobolisation package," Mr Motumi said last month.

"But those who did not, that is where the challenge is."

He said the department had to interview applicants and verify their credentials in order for them to be granted benefits.

Democratic Alliance defence spokesman David Maynier said: "One can now understand the reluctance, on the part of the military veterans department, to cost the Military Veterans Bill.

"The numbers are terrifying.

"The benefits envisaged for military veterans are clearly unaffordable, with an estimated price tag of R20bn. The bill has been bungled, and the blame falls squarely, in my view, on the ministerial task team for military veterans," he said.

"The ministerial task team appears to have been a policy rigour-free zone, producing little more than a wish list of benefits for military veterans. The Department of Military Veterans is going to have to go back to the drawing board and rethink the Military Veterans Bill."

Attempts to reach Mr Motumi for comment were unsuccessful. -BusinessDay